Mr Price posts record R6bn operating profit

Mr Price Group has increased total revenue by a modest 4.2% to R42.7 billion for the 52 weeks to 28 March 2026, the group announced in a Sens statement on Friday.

The group’s earnings in the 2026 financial year were impacted by the expensing of all once-off costs relating to the acquisition of German retailer NKD for approximately R9.6 billion, which became effective after year-end.

As a result of the weight of the NKD deal, Mr Price says normalised performance metrics have been presented to reflect the group’s underlying performance.

Read:
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The diluted headline earnings per share increased by 8% on a normalised basis, while the group expanded its annual gross profit margin by 70 basis points to 41.2%, despite the retail sector being highly promotional.

The group believes its disciplined execution of its value-driven model delivered positive operating leverage, with operating profit growing by 4.3%, (8.0% up when normalised), exceeding R6 billion for the first time. This is before interest and tax.

Household disposable income showed some signs of recovery during 2025; however based on external research, the group added the discretionary retail sector was not an immediate beneficiary of this improvement.

“I am very proud of how our team has responded to the volatility experienced this year. The agility of our operating model and the strength of our value retailing DNA have enabled operating leverage in a challenging retail environment,” group CEO, Mark Blair, said.

Segments

The apparel segment increased retail sales by 4.2% to R32.8 billion, outperforming the Retailers’ Liaison Committee growth of 3.4%, while comparable retail sales increased 1.1%.

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Performance in the second half of the year was against a high base, with retail sales and comparable sales growth of 9.8% and 5.8% respectively in the prior year.

Despite the softer topline growth for the sector resulting in a highly promotional environment, the segment increased gross profit margin, driven by its three largest divisions.

The homeware segment grew retail sales by 3.8% (comparable store sales up 1.8%) to R6.9 billion. Sheet Street has reported consistently improved comparable sales over the last two years, and has delivered significantly improved profitability, supported by its space rationalisation programme.

Read: December surge powers Mr Price to solid third-quarter sales growth

Yuppiechef achieved double-digit sales growth and grew ahead of the market.

The telecoms segment revenue increased by double digits again, up 10.3% to R1.5 billion, while the financial services segment revenue increased 3.2% to R947 million.

Outlook

The escalation of the US-Iran conflict in late February 2026 placed global oil supply under pressure, driving a 38.3% increase in the oil price in quarter one of 2026, compared to the final quarter of 2025.

Renewed inflationary pressures on food and fuel and a reversal in the interest rate cutting cycle have compromised the early signs of consumer recovery.

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As with other businesses, the increased pressure on global supply chains, which directly impacts shipping rates and elevated oil prices, will have secondary effects on business input costs.

These pressures could persist through the remainder of the year and into 2027 if a peace agreement is not reached imminently.

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While the group has been largely unaffected from a business cost perspective and its supply chain planning has protected it from short-term price increases and surcharges, it says the duration of the conflict will determine the degree of materiality on business operations and the consumer.

“There is an underlying optimism about South Africa’s long-term prospects, and we remain positive about our business’ ability to continue performing strongly,” Blair added.

“However, the conflict in Iran has brought uncertainty to the short term and we are focused on ensuring that we manage the impacts and continue to deliver value to our loyal customers.”

The group has declared a final dividend of 592.8 cents per share, down  by a marginal 0.1% from the previous year.

Mr Price Group’s shares jumped almost 15% on Friday on the overall strong performance.

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