This morning Massmart released results which looked very muted. Here is the PDF presentation Reviewed Consolidated Results for the 26 Weeks Ended 23 June 2013.
"For the 26 weeks ended 23 June 2013, Massmart's total sales increased by 8.9% over the prior comparable period (being the 26 weeks to June 2012) while comparable sales increased by 5.5%. This level of comparable sales growth was inadequate to cover expense growth and consequently Group operating profit, excluding foreign exchange movements, was 1.0% below last year's equivalent figure. A large positive swing in foreign exchange movements however, caused headline earnings to increase by 51.9%. Excluding foreign exchange, headline earnings declined by 9.4%."
We were expecting these numbers thanks to a trading update a couple of weeks back. When you look at the segmental analysis you can see why the numbers are so muted. They are currently building new stores and distribution centres. These things are expensive and current slow sales growth is not helping. We are going to be patient with this one. There is no denying that sales are slow but that will not be forever.