South African fashion retailer Truworths posts 12% rise in annual profit

JOHANNESBURG (Reuters) – South African fashion retailer Truworths on Thursday posted a 12% rise in annual profit after it opened new stores and implemented cost saving measures to counter a tough inflationary environment.

For the year ended July 2, Truworths reported headline earnings per share – a profit measure – of 8.73 rand, up from the 7.8 rand posted in the previous year, which in trading terms was one week shorter.

As well as the impact of high inflation, South African retailers have faced additional costs to keep their stores open during the frequent local power cuts. Many have offered promotional schemes and sales on credit while managing inventory and costs to boost sales and margins.

Truworths said its sales for the full year were up by 11.2% to 19.9 billion rand ($1.05 billion) with an operating margin of 24%, slightly below the previous year.

The Johannesburg-listed company will launch new retail stores and brands, expand its in-house design capabilities, improve speed to market and invest in e-commerce as it seeks to bolster growth and margins in the current year, it said in a statement.

Its shares closed 1.7% higher, outperforming the broader index which fell on the day.

($1 = 18.9000 rand)

(Reporting by Promit Mukherjee; Editing by Kirsten Donovan)