Lewis Group (LEW) H2 2026 earnings summary

Executive summary

• Revenue increased by 11.1% year-over-year, driven by disciplined strategy execution and staff dedication, with merchandise sales up 7.3% and credit sales up 9.6%.

• Opened a record 58 new stores, exceeding the target of 40, and revamped 100 stores, maintaining a 22-year dividend track record.

• Gross profit margin reached 43.7%, and operating profit margin expanded by 110 bps to 23.8%.

• Balance sheet remained resilient, with improved returns, sound debtors book quality, and debtor book expansion of 15.2%.

• Dividend per share increased 12.1% to 897 cents, with a yield of 11.4% and payout ratio above 55%.

Financial highlights

• Operating profit rose 12.8% to R1,300m, and attributable earnings increased 13.1% to R854m year-over-year.

• HEPS grew 18.3% to 1,753 cents per share, and EPS increased by 13% to 1,646 cents.

• Return on equity improved from 15.4% to 16.2%.

• Revenue surpassed ZAR 10 billion for the first time, closing at ZAR 10.3 billion after an 11.1% increase.

• Borrowings ratio increased to 22.4%, and gearing ratio (including leases) to 40.0%.

Outlook and guidance

• Management expects continued market share growth despite external uncertainties and inflationary pressures.

• Plans to open at least 40 new stores in the next period, with a focus on credit sales as a growth driver.

• Strategic investment in staff training, upskilling, and operational efficiency to support growth.

• Borrowings ceiling adjusted to 30% to provide flexibility amid uncertain conditions.