Edgars Stores Limited, a Zimbabwean clothing retailer, reported a decline in unit sales, but an increase in revenue for the year ended January 7, 2024, despite a challenging economic environment.
In its preliminary unaudited financial information, the company highlighted a 10.8% decrease in total Group units sold, from 2.85 million to 2.55 million, compared to the same period last year.
Edgars chain recorded a turnover of ZWL$139.3 billion, up 98.5% from the previous year of ZWL70.2 billion, but the units sold were down 12.99% from 1.58m in the comparative period.
Jet Stores also saw a similar trend, with total sales for the Jet chain up 107.34% year-on-year at ZWL116.5 billion, but total units sold for the period down 13.03% from 1.16m to 1.01m.
Edgars blamed the decline in unit sales on “sustained inflationary pressures” which impacted negatively on disposable incomes.”
The company chairman, Thembinkosi Nkosana Sibanda, acknowledged the difficult operating environment, characterised by “exchange rate volatility and incessant inflationary pressures.”
He added that “liquidity challenges in both the local and foreign currencies persisted throughout the year coupled with elevated interest rates.”
Despite the decline in unit sales, the group managed to close the period with improved performance.
The Group reported revenue of ZWL294.0 billion, which is 70.3% up from that achieved in 2023 of ZWL172.6 billion.
Edgars explained that the growth in revenue was attributed to “margin improvements due to better procurement, ongoing cost management, as well as other initiatives implemented by management to ensure fresher and high-quality stock availability in our stores.”
The company did not declare a dividend for the year. “The position will be reviewed in future,” the report stated.
Edgars highlighted some bright spots, including an increase in USD sales and a growth in its USD loan book.
The USD retail debtors’ book closed the period at USD$12.6 million, representing a 100% growth on the prior year balance of USD$6.3 million. The USD loan book for Club Plus Microfinance also grew by 17% to USD$1.1 million.
Looking forward, Edgars acknowledged the headwinds of increased food imports and food inflation, which will likely reduce USD liquidity in the local market.
The Group said it would mitigate against the impact of sales volume declines by focusing on “enhancing cost-competitiveness through improving value chain efficiencies” and re-launching its Express shops, targeting the low-income segment of the economy.
Now that Edgars has successfully listed on the US dollar-denominated Victoria Falls Stock Exchange, the latest set of unaudited financials in Zimbabwean dollars (ZWL) will be the last.
