Discounter Pepkor's Q1 revenue rises on acquisitions and festive demand

About this update from Pepkor Holdings Ltd.

By Nqobile Dludla South African discount retailer Pepkor Holdings JSE:PPH reported a 12.9% rise in first-quarter revenue to 29.9 billion rand ($1.9 billion) on Monday, benefiting from acquisitions and growth in core clothing brand PEP and demand for tech products.Group sales from continuing operations increased by 10.6% in the festive season trading quarter ended December 31 compared to the same quarter in 2024, and rose by 5.2% when acquisitions are excluded. Like-for-like sales increased by 3% for the quarter, Pepkor said in a statement. Pepkor shares rose 3.7% to 27.45 rand by 0856 GMT.The clothing and general merchandise segment increased sales by 10.3% to 21 billion rand, boosted by the PEP and Brazilian clothing chains, as well as the incorporation of the recently acquired Legit, Swagga and Style fashion businesses. Furniture, appliances and electronics sales grew by 13.7% to 4.1 billion rand, supported by strong trading in tech products and the acquisition of OK Furniture and House & Home. The financial services business increased revenue by 47.6% to 2.4 billion rand as demand for insurance, retail credit and cellular device rentals remained high, Pepkor said. "Despite subdued sales growth in the first quarter, continued consumer pressure, and an intensely competitive landscape, management remains cautiously optimistic about performance for the remainder of the year as the comparative base normalises," Pepkor said. This will be mainly supported by strong brands and execution of its fintech operations, the retailer added.The company's model of selling clothing and household items at low prices has set it up for heavy competition with rivals such as Mr Price JSE:MRP, Pick n Pay clothing JSE:PIK and TFG's JSE:TFG Jet clothing chain, as retailers vie for shoppers grappling with high living costs. Last week Mr Price reported slower sales growth of 3.6% in its third quarter. ($1 = 16.1771 rand)

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