Shares of Mr Price rocketed more than 10% on Thursday after it said took market share from rivals during the crucial festive season.
The owner of brands such as Yuppie Chef and Studio 88 said sales volumes climbed after teething issues associated with the implementation of a new IT system were put behind it, while all of its stores now have backup power.
Goup retail sales grew 9.9% to R13.2 billion in the three months to 30 December, it said, with comparable store sales increasing 4.1%. It also experienced a bumper festive season, with retail sales soaring more than 15% in December.
Shares of Mr Price, valued at about R44 billion on the JSE, initially rose more than 10% before trading about 6% higher in mid-morning trade.
South African retail sales grew 9.3% to R12.3 billion, while non-South African corporate-owned store sales increased 18.1% to R964 million. The group was also able to pass on selling price increases of 4.9% and was able to boost total unit sales 5% to 105.4 million items.
Mr Price said the total retail market’s sales grew 3.4%, which meant that it had gained 130 basis points in market share over the period.
It added that the quarter had started slowly in October before improving in November, with the group recording growth of 5.3% over these two months. The market average, it added, during that same period was 0.8%.
This meant the group had gained 80 basis points of market share in the two months, including during the “key Black Friday week”.
The company said its retail division had gained market share for five consecutive months. It noted that while sales growth was strong across all departments, its kidswear division delivered a standout performance. It said this boded well for its new Mr Price Kids concept, which now had 30 stores and had the “potential to be a significant retail chain in the group”.
CEO Mark Blair said in a statement that the group had “anticipated a shift in momentum once we had successfully navigated the disruption of our [Enterprise Resource Planning] system change and the installation of load shedding backup power facilities in all our stores”.
“Our trading performance improved monthly and was strong during the critical month of December, with retail sales up 15.5% and a market share gain of 180 basis points,” he said.
“Most pleasing from this result is that group sales were also achieved at a higher gross margin percentage than last year.”
Over the past couple of years, the group has been on the acquisition trail, snapping up the Yuppie Chef and Studio 88 retail chains.
Shaun Murison, senior market analyst at IG, said Mr Price had “delivered a compelling performance,” managing to showcase its “resilience and strategic prowess in the face of industry challenges”.
“The company’s focus on profitable market share gains and the sustained performance of its acquired businesses are testament to its strategic agility and operational excellence,” Murison added.
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