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Fashion retailer Truworths says it expects to report a decline in earnings and group sales as its operational markets at home, South Africa, and in the UK remain under pressure due to further strain on consumers and subdued economic conditions in both markets during its 2026 financial year. The retailer said on Thursday HEPS for the year ending in June will fall 2%-4%, ranging at 722c-737c, compared with the 752.1c recorded in the previous year.Group retail sales fell 0.9% to R21.8bn, affected by a stronger rand-pound exchange rate in the second half. Sales in the African market, which has continued to drag the group down, were down 2.1%, while sales in the UK rose 4.9%.Truworths said consumers in both markets continue to face financial pressure during the period under review despite easing inflation in the UK this year and a boost in confidence in South Africa after the budget speech in February and interest rate reprieves.A soft labour market, dwindling cost of living and the ongoing conflict in the Middle East have further compounded the strain on consumers, creating unfavourable trading conditions.The strain is evident in Truworths’ credit performance. The retailer said account and cash sales for the period decreased 0.9% and 1%, respectively. Cash sales in Africa fell 5%, while credit sales, which contributed about 71% of the group’s retail sales, decreased 0.9%.This compelled the group to tighten its credit-granting approach, exercising prudence even when the demand for aspirational merchandise grew. “Demand for the group’s aspirational merchandise was reflected in strong new-account application volumes, and the online business again delivered strong growth, further increasing its contribution to segment retail sales. Active account holders able to purchase declined to 77% (2025: 79%), reflecting the pressure on existing customers’ disposable income over the period,” said the retailer.The group also noted growth in online purchases, with sales in Africa rising by 21.5% and contributing more than 8% to the segment’s retail sales. Online sales in the UK contributed 44.7% to overall segment sales. “The group’s position is underpinned by its strong balance sheet and net cash position; a portfolio of owned brands in Truworths Africa; Office UK’s relationships with leading international footwear brands; a well-managed credit book; a large account and loyalty customer base; established retail locations across South Africa and the UK; and a growing online presence. The group continued to invest in the business during the period and remains well positioned to benefit as consumer spending conditions improve.”The company’s share price rose the most in about four months on the day, up 5.13% to R54.95.Truworths will release its full-year results on August 27.Business Day
