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%, and EPS surged 80.7%.

• Total annual dividend declared increased 60% to 800 cents per share, with ROE reaching 15.4%.

• Satisfactory paid accounts hit a record 83.5% and debtor book quality improved.

• Store base expanded by 49 net new stores, including 33 opened and 16 acquired, with 170 stores revamped.

Financial highlights

• Gross profit margin reached 43.4%, exceeding targets due to favorable shipping and exchange rates.

• Credit sales grew 12.1% and now account for 68% of total sales.

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

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

• Net asset value per share rose from below ZAR 65 in 2018 to over ZAR 95 in 2025.

Outlook and guidance

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

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

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

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

• Recovery in discretionary spending expected to be challenged by macroeconomic and freight headwinds.