Mr Price on Thursday reported an impressive 14.9% growth in sales for the 18 weeks to August 4, proof the fashion retailer has once again read the market right.
Comparable sales increased 9.5% for the period, the Durban-based group said.
Cash sales constituted 78.5% of total sales.
Nedbank Securities analyst Syd Vianello said that in a value-oriented market consumers were opting for a Mr Price-type product.
“These are astonishingly good numbers. They have the right product at the right price. You put the right product at the right price in store and customers will buy — period.
“We would certainly be looking at upgrading our earnings forecast. They are just incredible numbers, really, really strong,” Mr Vianello said.
The number of units sold over the period increased 9.7%, and inflation of 4.7% was recorded, the retail group said.
Mr Price’s apparel division, which includes Mr Price, Mr Price Sport and Miladys, saw growth of 15.0% and 9.3% on a comparable basis.
The apparel division represents 71.6% of group sales, it said.
“The clothing business is funny and homewares are exactly like clothing, it’s all about product and price. Customers don’t care a damn about the name of the shop; all they’re interested in is product and price. You hit it right and you’ll do exceptionally well, and that’s exactly what’s happened with Mr Price,” Mr Vianello said.
Sales in the retailer’s home division inched up 14.4%. An increase in comparable sales of 10.1% was achieved. The division includes Mr Price Home and Sheet Street.
The company has opened 24 stores and closed five since the year ended March 2012.
Earlier this month, Mr Price launched its online retail offering‚ which‚ according to CEO Stuart Bird‚ allows the company to further strengthen relationships with its customers.
The fashion retailer’s e-commerce venture is aimed at helping will help the group gain market share and a competitive edge over rivals Woolworths, The Foschini Group and Truworths.
Competition in the clothing industry has been intensified by the entry of foreign players such as Zara and Cotton-On into the SA South African arena.
According to Mr Price’s research‚ e-commerce sales in South Africa made up less than 0.5% of total retail sales‚ far behind the US‚ the UK‚ Europe and parts of Asia‚ where e-commerce as a percentage of total retail sales ranges between 7% and 10%.
“Our customers are incredibly tech-savvy and need a convenient and secure way to get their fashion‚” Mr Bird said.
In July, the company’s share price rose to a record high after it announced the appointment of New York-based financial services company BNY Mellon as the depository bank for its American depository receipt programme.
The listing of depository receipts on the US over-the-counter market allows US investors to invest in the local retailer.
Foreign shareholding in Mr Price sits at about 45%.
Each Mr Price depository receipt represents one ordinary share and trades on the over-the-counter market under the symbol MRPLY.
Mr Price reported a 19% rise in full-year profit for the year to March 31.
Diluted headline earnings per share came to 464.5c for the year to March, from 388.8c a year ago.
The group’s return on equity increased from 46% to 47.2%.