"As anticipated‚ the sales performance for the quarter was impacted by the planned curtailment of credit sales growth. In the third quarter of the prior year‚ unsecured credit granted in SA increased by 57.1%‚" the group said in a trading update.
After being 1.68% higher at midday‚ Mr Price's share price tumbled almost 5% to record a loss of 3.31%‚ or R4.15‚ at R121.25 by the JSE's close.
The group's intention to remain a cash-based retailer and the "downside risks currently associated with unsecured credit"‚ led Mr Price to take a decision to slow credit sales growth off a high base.
"As a result‚ the growth in group credit sales in the current reporting period slowed considerably. This impacted the Mr Price apparel chain in particular‚ which also experienced the under-delivery of certain key categories of merchandise in October and November."
Retail selling price inflation for the period was 4.8%‚ with cash sales constituting 78.8% of total sales compared to 80.1% previously.
During the quarter the group opened 32 and closed two stores‚ adding a net 12‚294 square metres to its trading area‚ and ended with 1‚019 stores.
The apparel division‚ which includes Mr Price‚ Mr Price Sport and Miladys‚ which represented 73.3% of sales‚ achieved sales growth of 9.1% with comparable store sales growth of 2.9%.
The home division‚ which includes Mr Price Home and Sheet Street‚ achieved sales growth of 12.6% and comparable store sales growth of 8.8%.
Mr Price said its gross profit margin increased over the corresponding prior period‚ while collections from debtors were in line with expectations.
"The group is targeting an improved sales performance in the fourth quarter of the year due to an improved stock position and a base period which included lower credit sales growth‚" it said.
Sales for the period 30 December 2012 to 16 January 2013‚ which are not included in the period‚ reflected an increase of 17.2% over the prior period‚ with comparable store sales increasing by 11.7%‚ Mr Price said.
The third quarter was from 30 September to 29 December.
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
