By Siyanda Mthethwa
JOHANNESBURG (Reuters) -Shares of South African grocery retailer Pick n Pay fell sharply on Monday after the company said it expected its core business’s full-year trading loss to be broadly in line with last year.
At 1200 GMT, Pick n Pay shares were down more than 7%.
“The guidance that Pick n Pay’s FY26 trading loss will be ‘broadly in line with FY25’ is transparent but sobering,” said Shaun Murison, senior analyst at Rand Swiss.
“It acknowledges that near-term profitability is unlikely despite operational improvements.”
The country’s third biggest grocery retailer narrowed its loss before tax in the half year, reporting a loss before tax and capital items of 317 million rand ($18.31 million) in the 26 weeks to August 31 compared to 1.1 billion rand last year.
Murison said a 40% improvement in the attributable loss after tax to 496 million rand was “more concerning”.
This “suggests that much of the improvement comes from financing benefits rather than core business turnaround”, he said.
The group, which has been battling to regain some of its market share that it lost to one of its main competitors Shoprite, said its turnover grew by 4.9% to 58.8 billion rand, driven mainly by a 13.9% rise in Boxer’s turnover, its discounter business that it spun out last year, and a 0.1% growth in the Pick n Pay segment.
“The multi‑year journey of returning Pick n Pay to a profitable and future‑fit business continues to be tackled in a purposeful and methodical manner,” said the company, which aims for a 2028 break-even.
Group trading profit rose by 273.5% year-on-year to 310 million rand, also helped by a 931 million rand Boxer trading profit but softened by 621 million rand trading loss in its Pick n Pay business.
($1 = 17.3125 rand)
(Reporting by Siyanda Mthethwa; Editing by Sfundo Parakozov and Jan Harvey)
