South Africa’s Woolworths profit falls on weak Country Road chain

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South Africa’s Woolworths profit falls on weak Country Road chain

8:56 CAT | 03 Sep 2025

FILE - Shoppers walk towards a Woolworths store in Cape Town, South Africa, February 26, 2024. [File photo: Reuters/Esa Alexander]

South African fashion retailer Woolworths reported a 23.9% decline in full-year headline earnings, due to a weaker-than-expected performance from its Australian clothing chain Country Road Group, it said on Wednesday.

On a comparable basis, headline earnings per share (HEPS) fell to 268.1 South African cents in the 52 weeks ended June 29.

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Group adjusted earnings before interest, tax and amortization (aEBITDA) declined by 3.8% to 8.7 billion rand ($495.35 million), but beat average analyst estimates of 7.6 billion rand, according to LSEG data.

“In Country Road Group, the impact of a weaker and highly-promotional topline environment, coupled with diluted gross profit margins, amplified the degree of negative operational leverage in the second half,” Woolworths said in a statement.

This impacted the group’s overall financial performance in the period, it added.

The Country Road fashion chain, which operates in Australia and New Zealand, reported a sales decline of 5.4%. Its gross profit margin declined by 390 basis points to 56.4% due to the high promotional activity dominating the sector and the weaker Australian dollar inflating input costs, Woolworths said.

While costs were well-controlled, the other factors resulted in Country Road’s aEBITDA falling 41.1% to A$103.9 million ($67.51 million), the company added.

Group turnover and concession sales rose by 6.1% to 81 billion rand, buoyed by the food business, which the retailer said delivered above-market performance, with sales growth of 11% and 7.7% on a comparable-store basis.

Fashion, beauty and home sales in South Africa rose by 4.7% on improved product availability.

Woolworths declared a final dividend of 81 South African cents per share, down 31.1% from the prior year.

($1 = 17.5632 rand, 1.5389 Australian dollars)

Source: Reuters