Pick n Pay Rises as Retailer Says Consumer Pressure to Ease
Pick n Pay Stores Ltd. shares rose the most in two weeks after the South African supermarket chain said first-half earnings gained as much as 25 percent and that pressures facing consumers in the country may “begin to alleviate” in the coming months.
The stock increased as much as 3.3 percent, the most since Sept. 22, and traded 2.1 percent higher at 69.38 rand as of 11:25 a.m. in Johannesburg. That extended an advance for the year of 6.6 percent, valuing the Cape Town-based company at 34 billion rand ($2.4 billion).
South African consumers have been battling a range of challenges, including unemployment of 27 percent, the slowest economic growth since 2009 and rising interest rates. Inflation, which held steady at 5.7 percent in September, is the most likely factor expected to ease, Pick n Pay said.
Pick n Pay earnings per share excluding one-time items rose 20 percent to 25 percent in the 26 weeks ending Aug. 28 to as much as 8.33 rand, the company said in a statement on Friday. Sales increased by 7.2 percent. The retailer will release full half-year earnings on Oct. 18.
Shares in Shoprite Holdings Ltd., Africa’s largest food retailer, rose 0.5 percent, while Woolworths Holdings Ltd. gained 0.4 percent to 77.66 rand.
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