At Edcon's 59th Annual General Meeting today, Chief Executive Steve Ross updated shareholders on trading for the past three months as follows:
"Consumer spending remained buoyant during the quarter under review as consumer confidence continued to benefit from low interest rates and real wage growth."
"Against this background, Edcon, with its offerings of well-priced merchandise and appropriate fashion, continued to record exceptional sales growth for the first thirteen weeks of this financial year."
Ross reported total sales exceeded internal targets and rose by 25% when compared with the same period last year with an increase in average retail space of 10%.
By chain, sales growth rates were as follows:
Sales increase for quarter ended 2 July 2005 %
Average retail space change %
Edgars (incl. Boardmans)
“These growth rates were achieved with only 3% price inflation in Edgars and deflation of 23% in Jet,” Ross said.
Looking ahead Ross said, “inventory levels are appropriate in relation to projected future sales and winter seasonal merchandise is at lower levels than at the same time last year.”
“The debtors’ book remains in a sound condition. Collections for the quarter were ahead of budget and at billing in June 2005, 86% of the total debtors’ book was current and able to buy, versus 87% in June last year.”
As earnings for the first three months are in line with budget, the Edcon Board believes that the earnings guidance provided in May 2005 for the forthcoming year remains appropriate, namely that: “shareowners should expect another meaningful rise in earnings, above that of the sales growth.”
National clothing, footwear and textile sales are expected to grow in real terms in the year ahead, albeit at a slower pace than last year, but Edcon sales will be boosted by the opening of an estimated additional 12% average retail space (including 2% from the Topic acquisition). It should also be noted that this financial year contains one less trading week than last. This contributed 2% of sales and 4% of earnings in the year to March 2005.