Pepcore Holdings, one of the companies under Steinhoff [JSE:SNH], has reported a 7.6% increase in revenue to R20.9 billion from continuing operations largely driven by growing sales in the company's clothing and homeware retail brands.
According to Pepcore's trading update for the three months ended 31 December 2019, the retail chain company said clothing and general merchandise division saw a total revenue growth of 5% for the period.
Retailers Ackermans and Pep in total saw a sales growth of 6.4% and like-for-like sales growth of 3.2%.
"Sales performance was negatively impacted by a shift in "back-to-school" trade from December 2019 to January 2020 as a result of the later start to the school year. This is confirmed by double digit sales growth during the first three trading weeks of January 2020," said the retailer.
In the core clothing, Footwear and home wear products, retail selling price inflation increased to 9.1% compared to 1.6% in the comparative quarter, resulting in reduced sales.
Discount value market players, Ackermans and Pep expanded retail space by 4.8% compared to the comparative quarter.
In the rest of its African countries of operations, Pep Africa, which contributes 3% to the group's revenue, continued to strengthen "amidst adverse macro-economic conditions across most countries of operation," the statement said.
In the Speciality division, dedicated to footwear and small brands, a sales growth of 1.6% was reported with like-for-like sales reducing by 0.6%. Footwear struggled to perform compared to clothing.
"Consumers tend first to reduce spending on higher priced products such as footwear, resulting in a very challenging trading environment for the footwear brands. Tekkie Town continues to focus on improving stock-holding and other inefficiencies in the business which continues to impact performance," the statement said.
In the Furniture, appliances & electronics division, JD Group - responsible for Incredible Connection, Russells and HiFi Corp - reported revenue growth of 3.6% for the quarter. Retail sales went up by 2.2% while like-for-like sales declined by 0.7%. Credit sales suffered a drop in overall credit mix of 17.5%.
The group's Building Company reported a drop in sales and like-for-like sales of 4.1% and 2.9% respectively.
The Fintech division saw a revenue increase of 44.4%, including Capfin's contribution.
Pepcore's FLASH business, which consists of 170 000 traders, reported growth in revenue by 30.9%.