South African retailer Massmart reported an almost 16 percent rise in full-year profit on Thursday, as the firm controlled costs and closed some of its less profitable stores in a tough economic environment.
Massmart, majority-owned by Wal-Mart Stores Inc, posted diluted headline earnings per share of 587.6 cents for the 12 months to end-December, compared with 508.8 cents a year earlier.
Africa’s most advanced economy accounts for more than 90 percent of the firm’s sales, but spending by South African consumers has been constrained by inflation, rising debt levels and an unemployment rate of more than 25 percent.
Food and liquor sales increased by 11.7 percent, outpacing general merchandise sales growth of 1.5 percent, Massmart said.
“It is clear that general merchandise continues to be negatively impacted by very low discretionary spending by consumers,” the company said.
Massmart increased its total retail space by 1.2 percent over the period, but closed 10 of its more than 400 stores.
“We are hopeful that several key economic drivers in South Africa will improve in 2017 – lower food price inflation, some rand strength and possibly lower interest rates,” chief executive Guy Hayward said in a statement.
Headline EPS is the main profit measure in South Africa and strips out certain one-off items.
(Reporting by TJ Strydom; Editing by Ed Stoddard)