South African company Pepkor Holdings reported a 3.1% fall in its half-year earnings report on Tuesday (May 28). The retailer cited ongoing supply chain disruptions at local ports that impacted its merchandise imports.
The company, which is controlled by Steinhoff International and owns the local clothing brands PEP and Ackermans, reported that its headline earnings per share (HEPS) decreased to 75 cents in the half-year that ended on March 31, down from 77.4 cents the previous year.
However, normalized HEPS, which excluded certain non-recurring items, grew by 7.8%
On the other hand, the company's revenue rose by 9.5% to ZAR 43.3 billion ($2.36 billion), which could be credited to back-to-school sales and a strong Easter trade. PEP, Ackermans, and Pepkor's Specialty businesses all posted double-digit sales growth.
MarketWatch reported that the figure was higher than last year's figure of ZAR 39.53 billion ($2.15 billion).
Supply Chain Woes
Reuters cited South African state-owned logistics firm Transnet as saying that the port backlogs originated from factors like adverse weather and underinvestment in equipment and maintenance.
For its part, Pepkor said that its logistics teams are "making good progress" to make up for the backlogs by "prioritizing stock freshness" to minimize the risk of markdowns.
Meanwhile, retail gross profit margins increased by 200 basis points to 38.1%, which was a result of improved full-price sales with lower markdown activity at PEP and Ackermans and lower shipping costs at PEP.
Pepkor CEO Pieter Erasmus said that the company's "FinTech strategy," which enabled growth in its retail and customer acquisition capabilities, was "gaining momentum and showing early signs of success."
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