Foschini Group shares drop 19% as earnings forecast declines

THE Foschini Group (TFG) shares plunged over 19% on the JSE Tuesday afternoon after it reported that headline earnings per share for the six months to September 30 are expected to be 20% to 25% lower than the same period last year.

- EDWARD WEST

The group directors said the SA economy had softened “significantly” towards the end of its interim period.

Consumer sentiment and discretionary spend in South Africa had remained subdued for longer than expected, despite moderating inflation and recent interest rate cuts, the South Africa, UK and Australia clothing and homeware retail group said in a trading statement.

The share price traded at R97.25 on Tuesday afternoon, a price that was also well down on R145.05 a year earlier.

Negative operating leverage arose in the group from subdued sales growth and gross margin contraction, despite tight cost control; and also due to a 14.5% increase in finance costs from financing the White Stuff acquisition in October 2024, and from an accounting leases charge related to new stores and lease renewals, the group's directors reported.