The Foschini Group (TFG ) has announced robust interim financial results for the six months ending September 30, 2024, with record gross profits and a dividend increase despite challenging global economic conditions.
The clothing retailer on Friday reported a 2.5% rise in gross profit to R12.8 billion, setting a new record. Gross margin across all territories improved by 220 basis points, reaching 49.5%. Revenue growth varied by region, with TFG Africa seeing a modest increase of 0.6%, while TFG London and TFG Australia posted declines of 8.2% and 2.4%, respectively.
TFG CEO Anthony Thunström said, “All three territories have faced extended periods of macro-economic headwinds coupled with a high clearance-driven sales base in TFG Africa last year. However, our focus on retail fundamentals and our strategic investments have contributed to a record gross profit performance and stronger margins in all of our businesses”.
Despite these challenges, TFG’s focus on e-commerce and strategic investments paid off. Online sales in TFG Africa surged by 47.9%, contributing 10.7% to total retail sales. The company’s Bash platform, which has now surpassed 5 million downloads, now contributes 5.6% to sales.
TFG raised its interim dividend by 6.7%, to 160.0 cents per share. However, headline earnings per share declined by 5.6% to 371.6 cents.
TFG Africa performed well, driven by growth in cosmetics (up 11.6%) and homeware (up 6.1%). The business has benefited from its acquisition of Tapestry, especially in the furniture segment, where the group now sells over 50000 locally manufactured sofas annually.
TFG’s London division was impacted by inventory delays caused by disruptions in the Red Sea, along with high inflation and interest rates, which led to a 3.1% drop in gross profit. Similarly, TFG Australia faced consumer pressure, resulting in a 2.4% decrease in sales, although gross margins improved.
Looking ahead, Thunström said, “We are seeing some positive economic signals that could help drive demand.“
The group also announced the acquisition of UK-based White Stuff, a lifestyle retailer with 113 stores, for £51.7 million (R1.2bn). This acquisition is expected to enhance TFG’s presence in the UK market.
TFG said its strategic investments and focus on margin improvement, inventory management, and e-commerce continue to position the group favourably for future growth.
“We are well-prepared for a potential uptick in economic conditions,” Thunström said.
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