Edcon hopes to beat tough times

“It is challenging economically but we are still reasonably confident that we can grow the business and deliver comparable growth in sales," chief financial officer Steve Binnie said on Friday.

Binnie said the group had managed to grow sales in the quarter to June by improving its margins and taking advantage of growth opportunities across the business.

Edcon recorded a 7% growth in earnings to R789m before interest, tax, depreciation and amortisation, and sales grew 8% to R4,8bn.

Its results come on equally impressive trading performance recently by retailers Massmart and Woolworths, which however, warned of hard times ahead as consumers revise spending habits.

Stanlib economist Kevin Lings said food inflation was at 18%, while fuel prices were more than 36% higher than they were this time last year.

Binnie agreed times were tough, but said Edcon would buck the trend by maintaining sales growth in the months ahead.

As of June, Edcon was trading out of 1154 stores, up from 959 in June last year. Binnie said sales growth had been helped by improved margins in Jet Stores.

Binnie said Edcon was confident shoppers would still throng its stores despite the effect of high living costs.

Analysts have warned consumers are unlikely to splurge on festive shopping in the weeks before the Christmas period, which they said could be one of the most subdued in years.

Source: Business Day

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