South African retailer Woolworths Holdings Ltd posted a 30.6 percent jump in first-half profit on Thursday, but warned that weak growth in Africa’s most advanced economy could pose problems for the rest of the year.
South Africa’s retailers are battling to boost sales as consumers check spending amid rising interest rates and high unemployment, but Woolworths have done better than rivals, due to the appeal of its upmarket food and clothing to high-income customers.
Earnings per share were impacted by costs to acquire Australian department store David Jones and a share issue to finance the transaction, Woolworths said.
Headline earnings per share – the most widely watched profit measure in South Africa, which strips out certain one-off items – were up 30.6 percent at 253.5 cents for the first six months ended Dec. 31, 2015.
The company said it expects the weaker growth outlook for the global economy to make trading conditions tougher both in South Africa and Australia.
“Increasing interest rates in South Africa will add further pressure on the local consumer,” the company said.