Mr Price Group Limited

For the 26 weeks ended 27 September 2025, revenue increased 5.4% to ZAR 18.5 billion. Retail sales rose 5.5% ahead of the market’s 5.3%, with comp sales up 2.1% and weighted average space growth of 3.5% from 91 new stores. Gross profit increased 6.3% to ZAR 7.1 billion and gross margin expanded 30 basis points to 40.0%. Expenses grew 5.6% to ZAR 5.9 billion, operating profit rose 5.7% to ZAR 2.1 billion, profit after tax grew 7.3% to ZAR 1.3 billion, and HEPS increased 6.5%. Interest expense was ZAR 297 million versus ZAR 313 million last year, and cash and cash equivalents ended at just under ZAR 3 billion with a cash conversion ratio of 81.8% and 0 long-term debt. For the balance sheet, gross inventory rose 4.5%, working capital generated an inflow of ZAR 372 million, and capex in the half was ZAR 574 million; full-year capex is still expected to be ZAR 1.5 billion. Management did not give formal next-quarter revenue guidance, but said H2 is up against a much stronger base and that momentum into November is better after a softer October.

Mark Blair framed the business as outperforming a difficult environment by focusing on profitable market share rather than growth at any cost. He emphasized the company’s “secret sauce” as a mix of differentiated fashion value, a broad brand portfolio, Red Cap culture, disciplined processes, supply-chain agility, and technology. He also said the operating backdrop is improving, with better infrastructure, lower inflation expectations, easing rates, and a cleaner read on consumers once the two-pot retirement effect rolls off.

Praneel Nundkumar said the first half delivered exactly what management wanted in a difficult market: sales growth ahead of the market and higher GP margin. He cited revenue of ZAR 18.5 billion, gross profit of ZAR 7.1 billion, a 40.0% gross margin, operating profit of ZAR 2.1 billion, and HEPS up 6.5%, while expenses stayed tightly controlled at 5.6% growth. He also highlighted ZAR 3 billion in cash, 81.8% cash conversion, 0 long-term debt, ZAR 574 million of capex in H1, and a full-year capex plan of ZAR 1.5 billion tied to supply chain investment, including Gosforth Park DC due by September 2026. On margins, he said the group is targeting medium-term ranges of 40% to 42% gross margin and 13% to 15% operating margin, with Homeware targeted at 41% to 43%.

Analysts pressed management on H2 expense flexibility, markdown risk, gross margin support from lower input costs and a stronger rand, central overhead dilution, space growth, credit, and buybacks. Management said cost control remains active, that the H2 base is known and partly preempted, and that markdowns into January/February would be preferred over carrying bad stock past December if necessary. On margins, they said lower oil, cotton and shipping costs and the currency help, but deep discounting in the market could offset that; on credit, they said approval rates improved to 22.6% but they do not want to push credit aggressively given consumer risk and past experience. On buybacks, they said capital is more likely to be directed to high-return store growth, capex, and potential acquisition opportunities, including the remaining Studio 88 stake.