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The Retailer Liaison Committee (RLC) released its Market Sales Report for June 2026. Its members’ SA sales accounted for 45.2% of total SA clothing sales. Total Apparel, Homeware and Beauty sales contracted 3.3% y-y in June (May: 3.7% y-y), with a 6-month rolling growth slowing to 2.2% y-y and a 12-month rolling sales growth of 2.7% y-y. Last year June 2025, total sales growth had also declined significantly (-5.1% y-y), mainly due to the earlier onset of winter weather compared to June 2024. There was a strong bounce-back in July 2025 (+6.5% y-y). Given that this year’s weather patterns are similar to those of 2025, there may be a similar recovery in July 2026, in our view. Total SA sales fell 3.8% y-y in June, while Botswana, Lesotho, Namibia & eSwatini (BLNE) sales were flat at 0.5% y-y. The Rest of Africa sales grew 4.9% y-y. Apparel sales declined sharply by 5.1% y-y in June. Womenswear sales fell 4.4% y-y, with Menswear sales down 3.7% y-y. Kids & Baby sales declined 7.4% y-y. Beauty sales grew 5.1% y-y in June (May: 4.0% y-y). Homeware sales slowed to 4.1% y-y in June (May: 5.6% y-y). Total volumes contracted by 3.9% y-y in June (May: 2.1% y-y). The sharp drop in apparel volumes could explain the significant markdown activity we observed for apparel retailers in our store visits in July 2026. The heightened markdowns may support July sales growth, albeit at lower margins. Product inflation cooled to 0.6% for June (May: 1.6%). The average unit price for the RLC was 07 in June (compared to R133.32 in June 2025).

We have updated our Consumer Wallet model, which measures growth in consumer spending power and serves as a proxy for the likely level of retail sales growth this year. We cut our job growth forecast for 2026 from 1.5% y-y to 0.3% y-y, which could result in just 50 000 new jobs. This is due to weak momentum in the latest Labour Force Survey (LFS). However, the Quarterly Employment Survey (QES) shows decent wage growth, and we maintain our forecast of an average wage increase of 5.5% y-y. The Middle East crisis has resulted in rising interest rates and higher fuel costs. We expect consumer debt repayments to rise by R19bn, while their transport costs could increase by R34bn. Based on the latest estimates, consumer spending power in 2026 may be much lower than our initial forecast, with a 4.4% y-y increase in funds available for retail and discretionary spending (previously 9.4% y-y). We demonstrate the effects of various oil prices on Consumer Wallet growth. If oil prices average USD100/bbl for the rest of 2026, transport costs could increase by 12.9% y-y, and Consumer Wallet growth could slow to 4.2% y-y. We believe there may be a higher risk of markdowns for apparel retailers, given the increase in promotional activity.

Key points from Hudaco's (HDC) 1H26 results presentation

Diluted HEPS from continuing operations increased by 0.1% y-y to 953cps (1H25: 952.0cps). Revenue increased by 9.5% y-y to R4 212m, with Consumer-related revenue up by 2.7% y-y and Engineering consumables up by 15.3% y-y. Total expenses increased by 10.3% y-y with expense-to-revenue of 88.6% (1H25: 87.9%). Operating margin down by 70bps to 11.4%. Lower sales volumes as a result of lower consumer confidence from the Middle East conflict generated a decline in the operating margin. Dividend of 385cps (1H25: 350cps). Cashflow from operations increased from R365m to R316m. Gross debt decreased from R1 000m to R800m, while net cash increased from R43m to R146m. Capex increased to R80m (1H25: R38m). HDC has discontinued two underperforming businesses within Eternity Technologies: the alternative energy division, due to commoditisation, low margins and lower demand post-load-shedding, and the battery bay management and service business.

Key points from Naspers' (NPN) FY26 results presentation

For the first time, Spar SA’s expense-to-sales ratio exceeded its GPM. While the cost blowout in 1H26 may have been caused by non-recurring issues, our analysis indicates that the cost base has been trending upward over time. We show that staff efficiency (measured as staff per store serviced) has not improved since 2014, and staff costs-to-sales has increased from 3.5% in 2021 to 3.8% in 2025. We also find cost creep in warehousing and distribution expenses over the past 13 years, and conclude that there should be considerable opportunities for cost optimisation in Spar SA. We assess Spar’s vulnerability to higher fuel costs, but determine the impact to be marginal. The stability of SPP’s Irish business provides a welcome offset to its faltering SA operations. We expect its resilience to continue, allowing management to focus on resolving the issues in the SA business. Overdue debtor amounts spiked 19.6% y-y, and we estimate that the number of stores in distress may have risen from 115 to 133 over the past year. Spar may not have the capacity to take over all the distressed stores, and, if the stores fail, Spar SA’s footprint could shrink by up to 5%. While SPP has adequate debt headroom, there is some concern about the interest cover covenant. Term margins on SA debt were cut by 50bps in December, but we think the next covenant assessment in September could result in higher term margins. We assess the impact of higher interest rates, and estimate that SPP may have to reduce its debt by R936m if interest rates rose by 200bps, to avoid a covenant breach.

Diluted HEPS 342cps (USD) compared to 288cps (restated) LY. Revenue increased by 51.1% y-y from $7 181m to $10 848m. Growth was driven by LatAm (+200% y-y), partly driven by the acquisition of Despegar in May 2025, as well as Europe (+167% y-y) largely due to the acquisition of Just Eat Takeaway. GPM increased from 40.3% to 44.4%. Expenses increased by 63.8% y-y to $4 542m, while expenses-to-sales increased from 38.6% to 41.9%. OPM decreased from 1.7% to -2.0%. Dividend of 508 ZAR cents (FY25: 1 205 ZAR cents). Gross debt increased 7.1% y-y to $17 975m. Cash from operating activities decreased by 14.6% y-y to $1 627m. The gains on partial disposal recognised in the consolidated income statement relate primarily to the disposal of Tencent. The group recognised a gain on partial disposal of US$4.7bn in FY26 (FY25: US$6.0bn).

MRP delivered satisfactory FY26 results, and the focus will now be on integrating NKD, the Eastern European value retailer it acquired. Management’s target of 6.5% p.a. top-line growth to 2030 seems ambitious, considering NKD’s sales expanded at a 3.4% CAGR between FY18 and FY24, and FY25 sales improved by only 2.8% y-y. NKD’s GPM uplift from 56.7% to 64.5% over the past three years is remarkable for a low-cost, value retailer. It does raise concerns about the sustainability of the improvements, given that most of the uplift occurred while the business was presumably being prepared for sale. Management is targeting an EBIT margin of 8-10% by 2030, and given that its GPM is already above the target range of 62-64%, the OPM goal will require NKD’s expense-to-sales ratio to fall to around 56%. We question whether this level of expenses can be achieved in the high-cost-to-operate European markets. Moreover, NKD runs small stores averaging 300m2, which are less efficient and have a higher expense-to-sales ratio than large-format stores. We find its trading density is even lower than MRP’s Power Fashion chain, which may explain its low EBIT margin. The final 15% stake buyout of Studio 88 minorities, at R1.7bn, suggests that this division’s EBITDA surged by 29.6% y-y in FY26, on turnover growth of c. 7.3% y-y. This implies that the rest of the MRP Group’s EBITDA may have declined by 1.9% y-y.

The Retailer Liaison Committee (RLC) released its Market Sales Report for May 2026. Its members’ SA sales accounted for 45.3% of total SA clothing sales. Total Apparel, Homeware and Beauty sales grew 3.7% y-y in May (April: 1.4% y-y), with a 6-month rolling growth of 3.1% y-y and a 12-month rolling sales growth slowing to 2.5% y-y. Total SA sales grew 3.4% y-y in May, while Botswana, Lesotho, Namibia & eSwatini (BLNE) sales accelerated 7.2% y-y. The Rest of Africa sales grew 2.9% y-y (April: 0.0% y-y). Apparel sales grew 3.3% y-y in May. Womenswear sales grew 4.4% y-y, with Menswear sales up 8% y-y. Kids & Baby sales recovered marginally to 1.3% y-y. Beauty sales experienced a significant slowdown to 4.0% y-y in May (April: 9.6% y-y). This was likely due to surging inflation of 15.2%, and Beauty volumes falling 9.7% y-y. Homeware sales grew 5.6% y-y in May (April: 7.5% y-y). Total volumes grew 2.1% y-y in May (April: -1.0% y-y). Product inflation cooled to 1.6% for May (April: 2.5%). The average unit price for the RLC was 05 in May (compared to R132.97 in May 2025).

Key points from Premier Group's (PMR) FY26 results presentation

Diluted HEPS increased by 25.6% y-y to 1 135.5cps (FY25: 904.2cps). Revenue increased by 6.6% y-y to R21 192m. Gross profit margin up by 150bps to 36.2%. Operating expenses increased by 6.8% y-y, with operating expense to revenue stable at 25.2%. Operating margin up by 150bps to 11.1%. The growth in operating profit reflects the strong execution across the business, with tight cost management and a high demand for Premier's products. Dividend of 341.0cps (FY25: 271.0cps). Cashflow from operations increased by 57.7% y-y to R2 594m. Gross debt decreased from R2 457m to R2 390m, while net cash decreased from R467m to -R3m. Net debt to EBITDA stable at 0.86x. The acquisition of RFG Holdings Limited in March 2026 was completed at a value of R6.5bn. The commissioning of the Aeroton bakery during the second half of the year is expected to meaningfully contribute to economies of scale and introduce further efficiencies into the bread manufacturing and distribution process.

Key points from Powerfleet's (PWR) FY26 results presentation