Truworths, operating under the ticker TRU, is a notable retailer in the clothing, footwear, and accessories sector with a strong presence in Southern Africa and the UK, boasting listings on both the JSE and the Namibian Stock Exchange. A significant portion of its sales, approximately 70%, comes from South Africa and is credit-based, highlighting the importance of its credit management strategies. The retail landscape Truworths navigates is fiercely competitive, with numerous players ranging from Woolworths and Checkers to Pick 'n Pay, the Foschini Group, Mr. Price, Ackermans, and Pep vying for market share. This competition is further intensified by the entry of international brands like Cotton On, making the industry highly susceptible to consumer confidence and spending patterns. Moreover, staying profitable is a challenge due to the necessity for a keen understanding of rapid shifts within the fashion industry.
To maintain its market position, Truworths employs a conservative approach while continuously refining its business model. The company operates an extensive network of 767 stores in South Africa, along with 37 stores across the rest of Africa and 132 stores in the UK, Germany, and Ireland. Truworths recently expanded its portfolio by acquiring Barrie Cline, a ladieswear brand that has been a supplier for over three decades. Furthermore, the company is set to launch a new low-cost value chain named "Primark," aimed at competing directly with budget retailers like Mr. Price and Jet. This expansion plan includes the rollout of 15 to 20 new value stores in the coming months.
On the 9th of November, 2023, Truworths provided an update indicating a robust performance in the first 17 weeks up to the 29th of October, 2023, with retail sales surging by 10.9% and online sales by 41%, now accounting for 4.7% of total sales. The UK-based Office segment of Truworths saw a remarkable 18.9% increase in sales in Sterling terms to £91.3 million, up from the previous period's £76.8 million, translating to a 38.8% increase in Rand terms to R2.1 billion. Business Day reported that Truworths achieved an 8% sales increase in the six months leading to December 2023. The company anticipates that its HEPS will rise by between 0% and 4% for that period, noting a shift in the composition of Group retail sales with account sales representing 48%, down from 52% the previous year, while cash sales saw a 17.0% increase.
The share price of Truworths was notably affected by the COVID-19 pandemic, but analysts suggested a wait-and-see approach until it surpassed its downward trendline. This turnaround occurred on the 4th of September, 2020, with the share price jumping to 3195c and further appreciating to 7757c. Given its current P:E ratio of 8.88, Truworths is considered to be of good value at these levels.
To maintain its market position, Truworths employs a conservative approach while continuously refining its business model. The company operates an extensive network of 767 stores in South Africa, along with 37 stores across the rest of Africa and 132 stores in the UK, Germany, and Ireland. Truworths recently expanded its portfolio by acquiring Barrie Cline, a ladieswear brand that has been a supplier for over three decades. Furthermore, the company is set to launch a new low-cost value chain named "Primark," aimed at competing directly with budget retailers like Mr. Price and Jet. This expansion plan includes the rollout of 15 to 20 new value stores in the coming months.
On the 9th of November, 2023, Truworths provided an update indicating a robust performance in the first 17 weeks up to the 29th of October, 2023, with retail sales surging by 10.9% and online sales by 41%, now accounting for 4.7% of total sales. The UK-based Office segment of Truworths saw a remarkable 18.9% increase in sales in Sterling terms to £91.3 million, up from the previous period's £76.8 million, translating to a 38.8% increase in Rand terms to R2.1 billion. Business Day reported that Truworths achieved an 8% sales increase in the six months leading to December 2023. The company anticipates that its HEPS will rise by between 0% and 4% for that period, noting a shift in the composition of Group retail sales with account sales representing 48%, down from 52% the previous year, while cash sales saw a 17.0% increase.
The share price of Truworths was notably affected by the COVID-19 pandemic, but analysts suggested a wait-and-see approach until it surpassed its downward trendline. This turnaround occurred on the 4th of September, 2020, with the share price jumping to 3195c and further appreciating to 7757c. Given its current P:E ratio of 8.88, Truworths is considered to be of good value at these levels.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.