Edcon 13-week retail sales to December seen lower

Retailer Edcon expects retail sales for the 13 weeks ended December to be between R8.300 billion and R8.375 billion‚ compared with R8.386 billion in the same period a year ago. The forecast retail sales represent a slight decrease primarily due to the trading performance from the discount division as well as the effect of new initiatives in the Edgars division.

5 Feb 2013

Gross profit margin is expected to be higher due to improved margins in the discount division‚ while the Edgars divisional margin is expected to remain stable from the same period a year earlier‚ the company said on Monday in a statement.

On a same-store basis‚ retail sales are expected to be lower by 3.4% to 3.5%‚ primarily due to the trading performance of the discount division.

The Edgars division retail sales are expected to be between R4.525 billion and R4.560 billion from R4.367 billion a year go. The increase is primarily due to the continued opening of Edgars Active stores and increased promotional activity. "However‚ we expect same-store sales to be lower by 2.1% to 2.2% compared to the prior year period due to temporary disruptions as initiatives were implemented in Edgars stores. Promotional activity had a positive impact on our retail sales‚" the company said.

Discount division retail sales are expected to be between R3.140 billion and R3.170 billion‚ a decrease compared to R3.368 billion a year ago. Such decreases are primarily due to delays in stock delivery and lower mobile phone sales‚ as well as the discontinuation of the Discom brand.

"Margins continued to improve as the benefits of the change in product mix and improved pricing and sourcing initiatives materialised. We expect same-store sales to be lower by 5.8% to 6.0% over the 13-week period ended December 29 compared to the 13-week ended December 31 2011."

CNA retail sales are expected to be between R635 million and R645 million‚ compared to R651 million previously‚ a decrease primarily due to the continued closure of CNA stores and lower mobile phone sales. Same store retail sales remained generally stable over 13-weeks as compared to the prior year period.

Source: I-Net Bridge

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