Markets Doubt MR Price Euro Expansion as JSE: MRP Share Price Breaks the Support
Investor sentiment has been extremely uneasy as the retailer pushes into Europe with its largest-ever acquisition, despite Mr. Price's most
Quick overview
- Mr Price's latest earnings show solid operational performance, but investor sentiment has turned cautious due to a significant acquisition in Europe.
- The company announced a €487 million acquisition of NKD Group GmbH, which could expand its revenue and store count substantially.
- Despite a 6.5% increase in half-year earnings, the share price has dropped 13.67%, reflecting investor concerns about the acquisition's risks.
- Mr Price remains committed to dividends, declaring an interim dividend of 323.2 cents per share, while facing challenges from consumer pressure and cost inflation.
Investor sentiment has been extremely uneasy as the retailer pushes into Europe with its largest-ever acquisition, despite Mr. Price’s most recent earnings indicating a business that is fundamentally robust.
Mr Price Navigates Strong Results Amid Mounting Market Pressure
Mr Price entered the final stretch of 2025 with a complex mix of encouraging financial results, a major strategic expansion, and heightened market scrutiny. While the group’s half-year earnings reflected solid operational execution and steady sales growth, its share price has been unable to shake a persistent downward trend. This pressure intensified after the company announced a transformative deal to acquire NKD Group GmbH, a large value apparel and homeware chain operating across Central and Eastern Europe.
As of today, Mr Price’s share price has slipped below a crucial support zone, punctuating investor concerns about the timing, scale, and financial implications of the acquisition.
A Bold Leap Into Europe Through the NKD Group Acquisition
In a move that marks one of the most ambitious expansions in its corporate history, Mr Price confirmed it has entered into an agreement to buy 100% of NKD Group GmbH. NKD operates 2,108 stores across seven Central and Eastern European countries, placing it firmly within the fast-growing value segment — a retail category that has consistently outperformed the broader European market.
The total acquisition cost could reach €487 million (approximately R9.66 billion), including the purchase of shareholder loan receivables. CEO Mark Blair highlighted NKD as the “right business to pursue,” pointing to its customer-centric value positioning and the operational synergies with Mr Price’s existing retail model.
If fully integrated, the acquisition would significantly reshape the scale of Mr Price Group. Annual revenue is projected to jump from R40.9 billion to roughly R53 billion, total stores would climb from around 3,100 to more than 5,000, and the workforce would surpass 40,000 employees. Such a leap, while strategically promising, has unsettled investors. The share price has dropped 13.67%, reflecting fears that the acquisition risks outweigh the potential long-term return.
Earnings Strength Provides a Foundation, but Not Enough to Lift Sentiment
Despite the market’s current caution, the underlying business continues to demonstrate resilience. For the six-month period ending 27 September 2025, Mr Price posted a 6.5% increase in half-year earnings, supported by firmer retail trading and the consolidation of recently acquired businesses.
Headline earnings per share rose to 513 cents, up from 481.1 cents a year earlier, reaffirming that the company remains operationally sound even in a subdued consumer environment. Retail sales were also encouraging: group revenue increased 5.4% to R18.6 billion, with retail sales at R17.8 billion, outperforming the broader market’s 5.3% growth.
Management noted that the first quarter benefited from shifted school holidays, which provided a tailwind, while overall market share expanded across several core categories.
Even so, June was a challenging month. Aggressive discounting compressed gross margins by 20 basis points, and both Mr Price and the broader retail sector reported negative sales growth for the period.
Consumer Pressure and Cost Inflation Still Cloud the Outlook
While financial performance has been stable, the environment in which the group operates remains fraught with difficulty. Between 2022 and 2023, South Africa experienced a prolonged phase of negative real wage growth, leaving households under sustained financial pressure. This has curtailed discretionary spending and limited the pace at which retailers can grow volumes.
Lower interest rates and cooling inflation have offered some near-term relief, but not enough to meaningfully lift consumer confidence — an indicator Mr Price continues to watch closely. With core customers facing weaker purchasing power, the group has had to strike a careful balance between protecting margins and maintaining competitive price points.
Dividend Commitment Stands Firm
In line with its consistent capital return approach, Mr Price declared an interim dividend of 323.2 cents per share, representing a year-on-year increase of 6.5%. At current levels, this equates to a dividend yield of approximately 4.2%, aligned with sector norms.
Forward-looking projections remain optimistic: earnings per share are forecast to expand by 39.3% over the next year. If achieved, the dividend payout ratio would rise toward 47%, still within a sustainable level for a mature retailer. Notably, annual dividends have climbed from ZAR 5.80 in 2015 to ZAR 8.97, reflecting a compound annual growth rate near 4.5%.
Share Price Weakness Deepens as Key Technical Levels Break Down
Despite the company’s solid performance, the market continues to send bearish signals. Mr Price shares are down 38.13% for the year, erasing much of the extraordinary gains seen in 2024, when the stock more than doubled.
MRP Chart Weekly – The 50 SMA Rejected the Price Again 
The chart picture has deteriorated materially: after a failed recovery attempt in April, the stock was repeatedly rejected at the 50-week simple moving average. This dynamic confirmed that buyers have been unable to regain long-term momentum.
MRP Chart Monthly – Heading for the 200 SMA
As of today, the share has broken below the 200-week simple moving average around the R200 level, a historically significant support that held during pullbacks in 2020 and 2023. If sustained, this breakdown exposes the price to further downside toward R150, where the 200-month moving average currently sits — a level that has defined the long-term uptrend for years.
Conclusion: A High-Stakes Year Ahead
Mr Price finds itself in a rare moment of contradiction: its earnings are improving, its retail footprint is set to expand dramatically, and its strategic ambitions are clearer than ever. Yet the market remains unconvinced.
The NKD acquisition offers substantial upside — greater scale, geographic diversification, and entry into a fast-growing European value retail market. But at nearly R10 billion, it also raises questions about execution risk, integration complexity, and timing, especially as the domestic consumer environment stays fragile.
With sentiment turning sharply negative and major technical support levels breaking down, the coming months will be pivotal. Mr Price must prove that its bold expansion strategy can deliver sustainable growth without overwhelming its balance sheet — and persuade investors that this moment represents an opportunity rather than a warning.
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