Lewis Group (LEW) H2 2025 earnings summary

Executive summary

• Revenue increased by 13.5% year-over-year to R9.29bn, with merchandise sales up 9.2%.

• Operating profit grew 66.9% to R1.15bn, with operating margin at 22.7%.

• EPS surged 80.7% to 1,457 cents, and a total dividend of ZAR 8.00 was declared, up 60%.

• Record high satisfactory paying percentage of 83.5% and strong credit sales growth.

• Store footprint expanded with 49 net new stores, including 16 acquired and 170 revamped.

Financial highlights

• Gross profit margin improved to 43.4%, supported by lower shipping rates and better exchange rates.

• Credit sales accounted for 68% of total sales, up from 66% a year ago.

• Operating costs as a percentage of revenue slightly decreased to 34.5%.

• Cash flow from operations increased 34%, reflecting stronger performance.

• Debtors book grew 14.5% to R7.96bn; collections from instalment sales up 17.4%.

Outlook and guidance

• Gross profit margin target for 2026 set at 40%-42%.

• Plan to open at least 40 new stores, with 50% in the speciality segment.

• Satisfactory paying customer target range adjusted to 78%-82%.

• Operating margin target range for 2026 set at 16%-20%.

• No expectation of economic recovery; focus on market share gains and value-for-money merchandise.