The flurry of updates in the retail sector has continued, with Shoprite and Woolworths adding their names to the list. The underlying performance couldn't be more different.
Mind you, Woolies is doing a solid job of competing on the food side of things. As for apparel, it's another mess I'm afraid. In the prior year they blamed the ports and now they've blamed suppliers being late. I think the market is well and truly out of patience with the issues being everyone else's fault but theirs, especially when the Australian business is still going firmly in the wrong direction as well.
As for Shoprite, it's more of what you would expect. They continue to shoot the lights out in the core business, while incubating exciting new businesses like Petshop Science. If I was a retailer, I would actively avoid releasing results on the same day as Shoprite. It's like trying to scrum against a fresh bomb squad - not recommended.
Elsewhere in the food value chain, we saw AVI squeezing out solid earnings growth from muted revenue growth. They are pretty famous for doing this and they seem to still have the magic recipe for it. Over at Rainbow Chicken, profits have skyrocketed thanks to vastly better conditions in that industry. Tiger Brands has decided to exit the South American market with a sale of its investment in Chile.
Attacq sits even further up the value chain, holding the properties that these retailers operate from. Their festive update shows that the two-pot liquidity found its way into more discretionary retail categories, which ties up with what we've seen recently in other company updates.
And finally, Renergen issued a chunk of shares at these depressed prices. Sadly, with an ongoing need for capital, this is an ugly snowball effect that is difficult to do anything about unless the narrative improves.
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