Mr Price expands store network as profits cross R6bn mark

Mr Price group has reported solid annual financial performance amid volatile trading environment and pressure on consumer spending.

The group increased total revenue by 4.2% to R42.7-billion, while operating profit climbed 4.3% to R6-billion. Retail sales increased by 4.3%, heavily boosted by the telecoms segment, which delivered 10.3%, while the apparel segment delivered 4.2% and 3.8% growth reported for the home segment.

Group opens 196 new stores

The company also expanded its footprint, opening 196 new stores during the year. This supported space growth of 3.6% and reflects continued confidence in its store-led strategy.

The group revealed that April performance was weak due to declining consumer confidence following inflation pressures linked to the US-Iran conflict. However, sales improved in May and early June.

According to the group, global tensions remained high in 2025 due to conflicts and the US trade war but inflation remained manageable and lower interest rates helped consumers.

US-Iran conflict’s impact

Although global and South African economies were starting to recover with lower inflation and improving incomes, the US-Iran conflict pushed oil prices up and increased the cost of living again.

So far, the group has mostly avoided higher costs, as its supply chain planning has protected it from short-term price increases and extra charges. Deliveries have arrived on time and in full, meaning winter stock reached stores as planned.

Mark Blair, Mr Price group CEO, said how long the conflict lasts will determine how much it affects business operations and consumers.

“There is an underlying optimism about South Africa’s long-term prospects, and we remain positive about our business’s ability to continue performing strongly. However, the conflict in Iran has brought uncertainty to the short-term and we are focused on ensuring that we manage the impacts and continue to deliver value to our loyal customers,” said Blair.

Disciplined value-focused model

The group said its disciplined value-focused model helped it maintain pricing power while still attracting cost-conscious shoppers.

It said R8.8-billion was generated from operations and a strong cash conversion ratio of 85.8%. A final dividend of 592.8 cents per share was declared, maintaining a payout ratio of 63%.

However, reported earnings were weighed down by once-off costs linked to the acquisition of Pegasus Group Holding GmbH, which trades as NKD in Europe. These costs were excluded from normalised figures to give a clearer view of underlying performance.

Consumer conditions remained mixed. While household disposable income showed some improvement during 2025, the discretionary retail sector did not immediately benefit.

The company also faced a tough comparison base in the second half of the year, when spending had been boosted by withdrawals linked to South Africa’s two-pot retirement system.

“I am very proud of how our team has responded to the volatility experienced this year. The agility of our operating model and the strength of our value retailing DNA have enabled operating leverage in a challenging retail environment. We are confident in our ability to perform across economic cycles while continuing to deliver value to our customers,” said Blair.

Plan to open more stores in 2027

Looking ahead, the group plans to invest R1.1-billion in South Africa in the 2027 financial year, including around 180 new stores, as well as upgrades to supply chain and technology. In Europe, NKD is expected to invest €24-million and open about 150 new stores after officially joining the group in March.

“There is an underlying optimism about South Africa’s long-term prospects, and we remain positive about our business’s ability to continue performing strongly. However, the conflict in Iran has brought uncertainty to the short-term and we are focused on ensuring that we manage the impacts and continue to deliver value to our loyal customers.”

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