Mr Price (MRP) – HEPS Forecast update

We think there may be structural reasons for the weakness in topline growth of the core MRP Apparel division, which may include the consistent quality issues raised by the stylists in our merchandise surveys. Even after the significant markdowns in 1H20, we estimate the excess stock could amount to c.ZAR309m, which means that MRP’s GP margin may continue to be under pressure in 2H20.