Shoprite (SHP) H1 2025 earnings summary

Executive summary

• Group sales rose 9.6% to R128.6 billion for the 26 weeks ended 29 December 2024, with strong double-digit growth in RSA supermarkets and like-for-like sales up 5.4%.

• Trading profit increased 13.5% to R7.3 billion, and EBITDA grew 16.7% to R11.7 billion, outpacing sales and gross profit growth.

• Diluted headline earnings per share (DHEPS) rose 9.9% to 659.9 cents, and the dividend per share increased 6.7% to 285 cents.

• Market share gains of R4.7 billion achieved for the fifth consecutive year, with over 98% on-shelf availability and 283 new stores opened in the past 12 months.

• Major transactions included the sale of the furniture business (excluding Angola and Mozambique) and the acquisition of the remaining 50% of Pingo Delivery, impacting segment reporting and accounting treatment.

Financial highlights

• Like-for-like sales growth was 5.4%, and total income increased 10% to R33 billion.

• Gross profit grew 10.8% to R30.7 billion, with gross margin up 30bps to 23.9%.

• Return on invested capital was 16.6%, and return on equity reached 26%.

• Free cash flow generated was R4.4 billion, with a conversion ratio of 37%.

• Borrowings decreased to R5.8 billion, and borrowings to equity ratio improved to 21.1%.

Outlook and guidance

• Plans to open an additional 122 stores in the current year, with capital expenditure guidance of R8 billion for the full year.

• Internal food inflation expected to remain below 5% for the rest of the year, with January already showing 3.1%.

• Finance costs to remain elevated in H2 but expected to normalize in 2026.

• Focus remains on food retail, digital expansion, and growth in adjacencies such as pet, pharmacy, and alternative revenue streams.

• Effective tax rate expected between 30.2% and 30.7%.