Dis-Chem reported an 8% increase in Group revenue to R23bn for the six months ended 31 August 2026, although earnings came under pressure, with basic earnings per share (EPS) down 13.3% to 64.1 cents and headline earnings per share (HEPS) declining 12.8% to 64.3 cents.
Dischem Ceo Rui Morais
The retailer attributed much of its revenue performance to its Better Rewards loyalty programme, which has returned R1.5bn in instant value to customers since its launch in October 2025. The programme supported growth despite temporary price deflation across 45% of front shop retail sales.
“Our revenue growth, market share gains and improved retail total income margin highlight the sustainability of the Better Rewards programme,” says CEO Rui Morais.
“It supports business growth while offering customers value at the till, as they remain constrained by the current economic climate.”
Better Rewards drives customer activity
Active Better Rewards membership increased 27% to 8.2 million, including 760,000 reactivated members and 980,000 new members. Members accounted for 86.1% of Dis-Chem’s total sales.
The programme has also expanded its participating brand network from 140 to 200 brands, which collectively represent 45% of front shop retail sales.
Dis-Chem recorded front shop volume growth of 5.5%, compared with 0.1% for the rest of the market, according to NielsenIQ data for the 52 weeks to 27 September 2026. Pharmacy revenue increased 10.4%, with the group reporting further market-share gains.
Active members who had shopped with Dis-Chem before the programme launched now shop twice more on average, while their basket value has increased by 3.5%.
Store expansion supports revenue growth
Dis-Chem opened 14 retail pharmacy stores during the period, including two Store of the Future locations at Melrose Arch and Irene Village. The new-format stores recorded initial trading densities 25% higher than original-format stores at the same stage.
At 31 August 2026, the group operated 328 retail pharmacy stores and 36 retail baby stores. Retail revenue increased 8.2% to R19.6bn, with comparable pharmacy store revenue growing 3.4%.
Wholesale revenue rose 9.6% to R18.4bn. Revenue to Dis-Chem’s own stores increased 10.3%, while external revenue to independent pharmacies and The Local Choice (TLC) franchises grew 7%.
TLC revenue increased 9.3%, with the franchise network expanding from 258 to 294 stores. The wholesale business now services 1,690 independent pharmacies, representing approximately 89% of that market.
Margins improve as costs rise
Group total income increased 9% to R7.2bn, with the total income margin improving to 31.4%, from 31.1% in the comparable period.
Retail total income rose 11.1%, while its margin improved from 30.8% to 31.7%. Dis-Chem attributed the improvement to more effective promotions, higher transactional gross margins across core categories and sustainable funding from Better Rewards.
The wholesale total income margin declined from 8% to 7.3%, reflecting the lower single exit price (SEP) increase.
Group expenses increased 12.1%. Retail expenses rose 13.7%, partly reflecting investment in new stores and X, bigly labs, the group’s innovation unit. Retail employment costs, which account for 53% of total expenses, increased 12.8%. Wholesale expenses grew 8.9%, supported by network cost efficiencies.
Net working capital improved to 18.8 days, from 24.4 days at 28 February 2026. Capital expenditure totalled R712m, including R492m for expansion and R220m for replacement.
The group declared an interim gross dividend of 25.62 cents per share, 12.9% lower than the previous period. The payment date is 23 November 2026.
Digital investment and FY2027 priorities
Dis-Chem’s organisational restructure is 60% complete and is expected to conclude in December 2026. The group says the changes are intended to clarify accountability and support faster execution, alongside increased use of data-led decision-making through X, bigly labs.
Since the unit’s launch, R240m has been deployed to re-platform the group’s digital estate and transform the operational capabilities supporting it. This has included work on its commerce platform, cataloguing, pricing, fulfilment and order management.
Dis-Chem has also released the first version of its new app to 22,000 customers, with a second release planned for a wider audience in the final quarter of FY2027.
For the seven weeks to 19 October 2026, Group revenue grew 7.9% year on year. Retail revenue increased 7.2%, supported by five new pharmacy stores, while external wholesale revenue rose 12.4%.
NielsenIQ data showed front shop volume growth of 4.9% for Dis-Chem in September, while the wider market, excluding the group, recorded a 2.6% decline.
The group’s FY2027 priorities include opening 30 retail pharmacy stores, 19 of which are already trading. All new stores will use the Store of the Future format, known as the Health Hub, while existing stores will be assessed for revamps based on their potential to contribute to revenue and earnings growth.
