Truworths looking sharp

Fashion retailer Truworths International on Friday reported higher sales in the six months to December and said earnings were also expected to show gains.

The retailer said basic and headline earnings per share were expected to be 20%-30% higher than in the first six months of the previous year. However, the period included an extra week. During the period, which Truworths said was “challenging”, group sales were up 20% at R3bn. Like-for-like sales were 11% higher and product inflation was about 6%.

The company said trading space had increased 12% compared with December 24 2006 as 20 Identity, 21 Truworths, two YDE and nine Uzzi shops were opened and four Truworths shops were closed.

Excluding the effect of the additional week, group sales would have grown 15%, and 7% on a like-for-like basis. Basic and headline earnings per share would have improved 15%-20%.

Syd Vianello, a retail analyst with Nedcor Securities, said Truworths' numbers were “very good” and in line with expectations. He said though like-for-like sales were “a bit down”, this did not detract from the company's performance.

A year ago, Truworths said headline and basic earnings a share were expected to be 32%-38% better than the first half of the year before.

Sales totalled R2,5bn, a 30% improvement, with like-for-like sales growing 19% and inflation of 2%.

However, the company said the rate of sales growth had been affected by the National Credit Act and rising interest rates, which slowed debt collection.

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