Pepkor's stock struggles despite sales growth in tough economy
Pepkor Holdings Ltd is under growing pressure as its share price falls and economic challenges mount. The South African retailer, known for its budget-focused brands, has seen its valuation dip amid rising costs and weak consumer spending. Investors are now watching closely to see if the company can turn things around in the coming months.
The retailer's latest quarterly report, released on 2 February 2026, showed mixed results. Group sales from continuing operations rose by 12.9% year-on-year to 29.9 billion rand, with clothing and fast-moving consumer goods up 10.3% to 21 billion rand. Furniture and electronics grew by 13.7% to 4.1 billion rand, while financial services surged 47.6% to 2.4 billion rand. Despite these gains, the stock price climbed just 3.7% to 27.45 rand, reflecting broader market scepticism.
Pepkor's current market capitalisation stands at 5.3 billion euros, but its shares are trading between 17 and 18 rand—far below recent highs. Rising logistics, rent, and wage costs are squeezing profits, while high interest rates in South Africa add to its debt burden. Weak household purchasing power continues to drag on sales, as consumers cut back on spending.
Analysts remain divided on the company's outlook. Some see potential in its broad customer base, which could attract more cost-conscious shoppers in a tough economy. Others warn that economic risks, currency volatility, and structural challenges in South Africa may keep pressure on performance. The company is now in a consolidation phase, with investors waiting for clearer signs of recovery in the next set of results.
The coming months will be critical for Pepkor as it navigates a difficult stock market. While its latest sales figures show growth in key areas, ongoing economic pressures and a cautious investor mood mean uncertainty remains. The retailer's ability to manage costs and retain budget-focused customers will determine whether it can regain stronger footing.
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