The Foschini Group Limited reported a 6.5% decline in half-year operating profit as growth in its largest market, Africa, was outweighed by weaker performances in the UK and Australia.
TFG said on November 6 that group operating profit fell to R2.1 billion for the six months ended September 30, 2026. Headline earnings per share declined 6.8% to 272.8 South African cents, with Reuters separately confirming both the percentage decline and per-share figure.
Group revenue edged 0.1% higher to R31.4 billion. Retail turnover declined 0.4% on a reported basis to R29.0 billion, although it increased 1.4% when measured in constant currencies, highlighting the effect of exchange-rate movements on the retailer’s international operations.
The company declared an interim dividend of 121 cents per share, down 6.9% from the 130-cent dividend paid for the corresponding period a year earlier.
Africa business delivers growth
TFG Africa increased retail turnover by 3.8% to R19.7 billion, while operating profit rose 2.7% to R1.7 billion. The division’s performance provided the main source of growth within the group during a period marked by sharp profit declines in its other regional businesses.
Online sales in Africa climbed 53.3% to R2.2 billion. That total included R1.8 billion generated through e-commerce and R326 million from BashStore, a service through which employees place customer orders in stores using Bash devices.
The online increase showed the growing contribution of digital and store-assisted transactions to TFG Africa’s sales. It also came as the division expanded turnover and operating profit, in contrast with the contractions recorded by the London and Australian operations.
Group Chief Executive Officer Anthony Thunström said the African business had gained sales, profit and market share despite a difficult six-month period.
“In a tough six months, TFG Africa, our largest business, grew sales, profit and market share, and we have made tangible progress against our four key priorities, all aimed at enhancing returns,” Thunström said in the company’s results release. “Conditions in the UK and Australia have been extremely tough, and we are doing everything we can to restore the required returns in those businesses.”
International operations weigh on earnings
TFG London’s retail turnover fell 2.2% in local-currency terms, while its operating profit declined 26.5%. The Australian division recorded a 4.4% fall in local-currency retail turnover and a 28.3% reduction in operating profit.
The declines in both international divisions were substantially steeper at the operating-profit level than at the sales level. Their weaker results offset the increases achieved in Africa and contributed to the fall in group operating profit and headline earnings per share.
The difference between reported group retail turnover, which fell 0.4%, and constant-currency turnover, which rose 1.4%, also reflected the influence of translating international sales into rand. TFG reports across its African, London and Australian operations, making currency movements a factor in its consolidated figures.
Cash flow rises as spending and debt fall
Despite the earnings decline, TFG generated R3.7 billion in cash from operations, an increase of 20%. Capital expenditure was reduced by 37% to R672 million, while inventories were 4% lower at R15.3 billion.
Net debt before the impact of IFRS 16 decreased by R1 billion to R9.1 billion. The combination of stronger operating cash generation, lower capital expenditure and reduced inventory indicated progress in managing cash and the balance sheet during the period.
The half-year figures leave TFG with contrasting regional trends: modest group revenue growth and a stronger African operation on one side, and lower sales and sharply reduced operating profits in the UK and Australia on the other. Restoring returns in the two international businesses remains central to improving the group’s overall earnings performance.
