The Spar Group stock experienced a soft trading day, down nearly 2% to 48.10, with investors expressing frustration and hoping for upward momentum. While the retail environment remains challenging, the company's strong wholesale balance sheet provided some reassurance to investors.
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Spar's been treading water at 45.89 for months while Shoprite keeps grinding away on better margins and scale. The wholesale division ought to be a real strength but you'd never know it from the numbers. Positioned perfectly for a turnaround if management can tighten costs, but that's the bet you're making, not the certainty some folks are selling.
Worth reading into their latest trading update. Balance sheet holding up decent.
spar's been range bound between 44 and 47 for ages now. the dividend yield is still decent at that level but you're not getting growth, just slow bleed from load-shedding hitting foot traffic. gonna be shocked if they crack 50 without a proper turnaround in consumer spend or a margin surprise from their wholesale side.
Interesting numbers on the last set, especially the like-for-like sales holding up better than I expected given the pressure on consumers. At 45.89 you're paying what, maybe 12x forward on a business that's still generating decent cash despite the margin squeeze from discounting and energy costs. My reading of this: the real question isn't whether Spar can trade, it's whether management can actually grow earnings per share again rather than just maintaining volumes. Could be wrong but I think the market's got this priced for stagnation, not recovery.
Retail environment still tough but balance sheet holding up well on the wholesale side.
Do you think the margin squeeze from loadshedding costs is temporary or structural at this point. Earnings miss last quarter is one thing, but if like-for-likes stay flat through winter that's a different story.
@mumu_data volume's definitely shifted lately, ja
@pedant_pete ja, the logistics cost thing is killing them. Like-for-likes have to turn first.
@rawssy_links what does thin volume mean for holding gains though, still learning this stuff
load-shedding's killing the whole logistics chain and comps are still underwater, but if they hold the dividend at these levels then management's not worried about cash flow falling apart. 48.50 looks reasonable if you can stomach waiting for like-for-likes to turn green, otherwise you're just catching a falling knife.
@mumu_data ja, volume's been picking up. About time too.
good morning everyone. spar's sitting just under 50 at 49.11, and the dividend held steady despite the earnings miss, which suggests management still sees cash generation through the load-shedding noise. like-for-likes are the watch point here, earnings relative to peers like pick n pay matter more than the absolute price right now.
Current R 45,89 — 50% of range
Fundamentals sourced from JSE disclosures. Updated quarterly.