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The SA Retailers will provide sales updates following the festive-season trading period. We summarised the expected release dates for the January 2026 trading updates (based on the prior-year release dates) and the most recent reported sales growth numbers in the attached document.

The Retailer Liaison Committee (RLC) released its Market Sales Report for November 2025. Its members’ sales accounted for 57.5% of total SA clothing sales. Total Apparel, Homeware and Beauty recorded soft sales growth of 2.4% y-y in November (October: 3.4% y-y), with a 6-month rolling growth of 1.9% y-y and a 12-month rolling growth of 4.7% y-y. Total SA sales grew 2.0% y-y for November, following a rebound in October of 3.6% y-y. Apparel and Beauty category sales grew 1.2% y-y in November. Womenswear sales growth was flat at 0.1% y-y, while Menswear sales slowed to 1.7% y-y. Kids & Baby sales growth was flat at 0.1% y-y. Beauty sales grew by a strong 15.2% y-y. Homeware sales grew 8.9% y-y for November (October: 7.4% y-y). Total volumes declined 1.7% y-y in November (October: -1.6% y-y). Total product inflation cooled to 4.1% in November (October: 5.0%). The average unit price for the RLC was 85 in November (compared to R120.83 in November 2024).

SPP’s restructuring over the past two years has delivered remarkable results. Net debt was cut by 46%, from R10.0bn to R5.4bn, while its leverage ratio dropped from a covenant-breaching 3.0x to 1.7x. Its operational footprint was simplified from five countries to three, reducing store count by 19.5% and headcount by 35.5%. Although SPP’s turnover fell by 12.0%, its operating profit rose by 46.3%, improving OPM from 1.2% in FY23 to 2.0% in FY25. Most of its critical challenges have been resolved, and management can now focus on two remaining issues – boosting turnover growth and restoring SA OPM to 3%. Despite these impressive improvements, the share price remains under pressure. SPP’s forward P/E has dropped to 8.6x, which is two standard deviations below its long-term mean of 14.9x. We argue this derating is not justified, given the substantial improvement in its financial position. While mindful of the remaining challenges, we believe there is a high probability of mean reversion, which could lead to a rerating of the shares. We believe management must refocus on expanding its franchise base to maintain market share. We think Pick n Pay’s (PIK) franchise store network could be a source of potential franchisees, as some of them may be dissatisfied with that retailer’s restructuring efforts. Even if PIK has headleases on many of these sites, defecting franchisees could set up competing stores in new sites, potentially with financial assistance from SPP, in our view.

Pepkor delivered robust FY25 results, mainly due to a strong performance in FinTech. Managements expects the gross credit book to grow c. 30% y-y in FY26, signalling strong appetite for credit. The FoneYam and Capfin units are rolling out longer-term products to ensure sustained growth in financial services. The Retailability acquisition completed post period-end and will be integrated for FY26. However, given that the Speciality division now has a significant number of chains, management is considering consolidation, and we think subscale brands like Swagga and Style may be consolidated into other brands. PPH is also exiting the Shoe City brand due to continued underperformance. The Pepkor Lifestyle business achieved good revenue growth and improved like-for-like growth in FY25. Management’s plan to integrate the SHP Furniture acquisition was delayed due to Lewis Group intervening in the transaction. We do not agree with Lewis’ statement that PPH would have a c.50% market share post-transaction, and we calculate that figure to be closer to 33%. While no timeline has been given for when the Constitutional Court matter will conclude, PPH is targeting full implementation towards end-FY26. PPH has signalled its intention to register as a banking institution, but it remains to be seen how it will align its proposition. So far, the Prudential Authority has only given regulatory approval in terms of Section 13(1) for PPH to establish a banking presence. PPH will put forward its proposition in the Section 16 application, and if successful, will be granted Section 17 to register as a bank. We don’t believe that PPH will partner with another bank given that it has made the CloudBadger acquisition, which should streamline banking integration and help avoid increasing costs associated with this endeavour.

Key points from Spar's (SPP) FY25 results presentation

Key points from Nampak's (NPK) FY25 results presentation

Diluted HEPS (continuing operations) down 14.2% y-y to 768cps. Switzerland treated as a discontinued operation. Comparable turnover growth +1.6% y-y (+1.8% y-y constant currency), with SA +2.3%, Ireland +0.6% (EUR). Improved momentum in 2H (+3.5% y-y). GPM (cont ops) up by 20bps to 10.8%. Expense-to-sales ratio increased from 10.0% to 10.9% with expense growth of 9.3% y-y. SA operating profit growth +6.8% y-y, while BWG -2.8% y-y. Net financing costs up 20% y-y, mainly due to SPAR Poland related debt taken on in SA. Impairments relating to SA stores, AWG, and Spar Switzerland resulted in assets and equity dropping by R5.2bn. Net debt reduced by 40%, to R5.4bn, due Spar Switzerland exit and strong cash generation. Group leverage at 1.74x. Management believes streamlined business will be more resilient and expects leverage to continue to improve.

Diluted HEPS from continuing ops of 10 322.0cps (FY24: 3 294.7cps). Revenue from continuing ops increased by 7.7% y-y to R10 727m. Operating expenses increased by 8.8% y-y with operating expense to sales of 75.1% (FY24: 74.4%). Operating margin up by 90bps to 18.1%. No Dividend (FY24: nil). Cashflow from operations increased by 233% y-y to R1 283m. The group has gross debt of R3 556m, while net cash increased from R521m to R1 261m. During the year, Nampak completed the disposal of the Bevcan Nigeria and the I&CS businesses, and the Tubes and Kenyan assets. These disposals yielded proceeds of R1.5bn. Intermittent production challenges on the recently commissioned Springs Line 2, have subsequently been addressed with significantly improved efficiencies and output.

PPC delivered a strong set of results for 1H26. While it is not visible at first glance, management was able to produce a solid turnaround. PPC SA and Botswana achieved margins not seen since FY18, and PPC Zimbabwe recovered well, despite the headwinds faced in the period. Management delivered on their promise to increase contribution margin across all business units, and they will implement more initiatives. In SA, electricity costs are expected to decline due to the commissioning of two solar plants and significant reductions are anticipated from the renegotiation of logistics contracts in 2026. In Zimbabwe, a clear maintenance schedule has been put in place, and OEE is expected to improve. Furthermore, by FY28, the Colleen Bawn solar plant should be operational, also significantly reducing electricity costs. As guided by management, the focus is on improving operational efficiency and increasing contribution margin. This is perhaps necessary in the current environment, where cement demand in SA is relatively weak and imports continue to rise. While imports do not really pose a threat to PPC directly, they could cannibalise already weak demand in a very price-sensitive market. This is why we believe that PPC needs its turnaround strategy to work and get RK3 operational without any delays. We are confident that through management’s initiatives, the group should be able to expand margins further, and compete with low-cost producers. However, this does require higher construction activity in SA. While the Western Cape is performing well and the outlook is positive, the Northern Region remains under pressure. With increasing competition from Chinese companies and local producers, PPC should remain wary.

Lewis delivered strong results in 1H26, building on a solid base from the prior year. Double-digit top-line growth was supported by solid expansion in Other revenue, which benefited from the increase in the group’s credit book. Record new store openings contributed to top-line growth, but opex growth was curtailed by good cost management, and LEW expanded its margins.   The group’s core business, the Traditional segment, performed well over the last six months. Although all brands in the segment increased revenue and were profitable, Lewis stores and Best Home & Electric continued to outperform the Bearers brand. This was mainly due to consumer disposable income being constrained and the stronger credit sales in the first two brands. In the Speciality segment, we demonstrate how the UFO brand achieved a recovery in revenue growth, following consecutive periods of decline. This segment was targeted for aggressive store expansion, with the group opening a net 28 new Real Beds stores, bringing the total to a record 40 new stores across both segments.   The gross debtor book continues to expand, landing at R8.5bn in 1H26. The book’s good health and the reduction in arrears are why we believe management felt confident to lower impairment provisions to 36.9%. Satisfactory paying customers now make up 82.7% of all accounts, which we think bodes well for continued investment in the credit book and the potential lowering of the debtor provision.   LEW’s application to intervene in the Pepkor and Shoprite transaction has been referred to the Constitutional Court, after LEW submitted its arguments regarding its right to intervene. While we show that Pepkor’s post-transaction market share should not be as high as LEW’s 50% prediction, we do believe there are valid concerns about the significant scale Pepkor would acquire, which could influence its procurement power in the market.

Key points from Quantum Foods (QFH) FY25 results presentation

MRP delivered good results for 1H26 in a challenging market, with dHEPS increasing by 6.4% y-y. Turnover growth in its Apparel division was driven by Power Fashion (+10.2% y-y) and MRP Sports (+9.3% y-y). The core MRP Apparel chain recorded soft growth of 4.0% y-y, which is a concern given its significance to the group. Studio 88 also had underwhelming sales growth of 5.5% y-y (on space growth of 6.1% y-y), and we think it may be in a mature growth phase. The slowdown in Studio 88 may have reduced the GPM dilution from this lower-margin branded business. Although Homeware sales growth improved to 5.1% y-y in 1H26, it follows three years of low and contracting top-line expansion. MRP Home continues to lose market share, but management is comfortable with pursuing only profitable market share.   While MRP’s inventory growth seems reasonable at 4.4% y-y, its prior-year stock level was elevated and stock days have nearly doubled since 1H22. Despite the elevated stock levels, its provision dipped to 5.9% in 1H26, and we see a risk of inventory overhang, potentially leading to higher markdowns.   The valuation of Studio 88 has increased to R8.6bn (+13.3% y-y), and we estimate that the remaining 15% to be acquired in March 2026 could cost MRP R1.3bn, bringing the total purchase price of Studio 88 to R5.8bn.   Management seems to be preparing the market for an upcoming offshore acquisition. We believe MRP’s lack of offshore exposure and its focus on the local market are strategic advantages. SA retailers have struggled to expand in both developed markets and in some emerging markets in Africa. While the latter carries higher political and currency risks, we believe its demographic growth advantages more than compensate for this in the long run.