Lewis Group increased total revenue by 8.7% in the nine months to December 2023 in an environment of sustained pressure on consumer disposable income while load shedding and congestion at the local ports continued to negatively impact economic growth.
The furniture retailer said group merchandise sales grew by 4.2%. The group's traditional retail brands of Lewis, Beares and Best Home & Electric grew sales by 6.6%, driven by the continued consumer demand for credit.
Sales in the group's cash retail brand UFO fell by 14.5%.
Group credit sales increased by 17.5%, accounting for 65.8% of total sales. Group cash sales reflected the impact of higher fuel, energy, food and borrowing costs on discretionary spending and fell by 14.4%.
Comparable store sales in the traditional brands grew by 3.2% for the nine month period and by 1.5% for the group.
Group merchandise sales for the third quarter to December 2023 increased by 3.5%. Sales in the traditional retail business increased by 5.7% with UFO sales 14.8% lower.
Other revenue, consisting of effective interest income, ancillary services income and insurance revenue, benefited from the strong credit sales growth over the past two years, increasing by 18.5% for the third quarter and 15.2% for the nine months.
Collection rates remained resilient in the weak consumer environment at similar levels to those reported for the interim results to September 2023.
Collection rates settled at 80.7% for the nine months (82.0%) and 80.3% for the third quarter (Q3 2022: 82.7%).
Debtor costs were 47.4% higher for the quarter and 59.8% higher for the nine month period due to the robust growth in the debtors' book.
Lewis Group’s share price traded 1% lower at R41.50 early Friday afternoon, slightly lower than the R46.06 it was trading at on the same day a year before. It closed the day at R41.51, 0.98% lower.
BUSINESS REPORT