Foschini Earnings Disappoint as Profits Slide, JSE: TFG Share Price Breaks Support on 50% Decline
The Foschini Group’s latest earnings reveal revenue growth overshadowed by profit declines, as weak demand and rising costs weigh on one...
Quick overview
- The Foschini Group reported revenue growth of 12.22% to R31.39 billion, but profits declined by 21.20% due to rising costs and weak consumer demand.
- Challenging trading conditions across key markets, particularly in South Africa, have pressured margins and overall performance.
- Despite a strong digital expansion with eCommerce sales up 55.3%, investor confidence has waned, leading to a significant drop in stock value.
- The company declared an interim dividend of 130 cents per share, an 18.8% reduction from the previous year, reflecting ongoing financial challenges.
The Foschini Group’s latest earnings reveal revenue growth overshadowed by profit declines, as weak demand and rising costs weigh on one of South Africa’s biggest retailers.
Apparel giant faces margin pressure amid tough trading conditions
The Foschini Group (TFG), one of South Africa’s largest apparel retailers with brands such as @home, Jet, American Swiss, Sportscene, and Total Sports, released its full-year results for the six months ended 30 September 2025. The report revealed a mixed outcome — steady revenue growth overshadowed by a notable decline in profit, reflecting a challenging retail environment across all major regions.
Challenging Conditions Across Key Markets
Despite higher sales and revenue, TFG’s profit weakened in the first half of its 2026 financial year. The company cited uneven trading conditions across Africa, the UK, and Australia as the main factor behind the subdued performance. The acquisition of the UK fashion chain White Stuff in 2024 continued to support sales figures, but its effect waned in 2025 as organic growth slowed.
Margin Pressures Weigh on Results
While TFG’s digital expansion and revenue growth were encouraging, rising costs and declining margins eroded profitability. The retailer highlighted that consumer demand in South Africa was particularly soft in June and September, pressuring performance during what is typically a stronger retail period.
Investor Confidence Erodes as Stock Declines
Investors reacted cautiously to the latest figures. TFG shares fell to R84.50 on Friday, down more than 50% year-to-date, marking a sharp drop from R167.50 at the start of 2025. Although shares briefly climbed 6.5% on Friday and 8% for the week, the overall trend remains bearish. Technically, the stock’s 200-month SMA now signals prolonged weakness, suggesting further downside risks unless the company stabilizes its margins.
Foschini Group (TFG) Interim Earnings Overview
Financial Performance
Revenue climbed 12.22% to R31.39 billion, reflecting solid overall trading momentum across key markets.
Retail turnover advanced 12.66% to R29.15 billion, driven by robust domestic demand and an expanding online footprint.
However, profit for the period dropped 21.20% to R944 million, with basic earnings per share also down 21.20% to 290.8 cents, signaling margin pressure and rising operating costs.
Regional Breakdown
- TFG Africa, the group’s largest segment, recorded 5.3% sales growth, aided by strong winter trade.
- The group opened 47 stores and closed 42, bringing the total to 3,619 stores across six countries.
- TFG London posted an impressive 69% increase in sales, largely due to the acquisition of White Stuff. Excluding that, growth was a modest 0.7%.
- TFG Australia experienced a 0.5% sales decline, reflecting weaker discretionary spending in the region.
Digital Expansion
- Online performance was a highlight, with eCommerce sales up 55.3%, propelled by continued growth in the Bash digital platform.
Dividend Update
- TFG declared an interim dividend of 130 cents per share, marking an 18.8% reduction compared to the previous interim payout for FY2025.
Long-Term Outlook Clouded by Uncertainty
TFG’s long-term growth story remains tied to its international footprint and eCommerce strategy, but near-term headwinds persist. Cost inflation, currency pressures, and subdued consumer confidence continue to challenge management’s turnaround efforts. Until profitability improves, investors may remain wary of the group’s direction despite its strong brand portfolio and digital growth potential.
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