The Foschini Group in South Africa – parent company of Tarocash, YD and Connor in Australia – has reported a year-to-date slip in its Australian sales by 1.4 per cent (in AUD).
The final quarter of the group’s financial year, ending March 14, saw its Australian sales relatively flat. This matches a 0.3 per cent slip in sales in the first half of FY26, with the total sales slip for Australia brought down in the third quarter when sales fell 2.6 per cent.
The third quarter covers the Christmas trading period to the end of December, a key time for many retailers.
In the 11 weeks to March 14, The Foschini Group reported decent sales growth in its bigger markets of Africa and London, both growing sales by 7.6 per cent and 3.4 per cent respectively.
In the 50 weeks to March (YTD), TFG reported a sales lift of 5.2 per cent in Africa and were up 0.4 per cent in London, excluding the group’s recent acquisition of local fashion brand White Stuff. When including this, YTD sales in London lifted by 31 per cent.
The company’s Australian market makes up around 13.5 per cent of the group’s total sales.
TFG added that geopolitical uncertainty is expected to contribute to elevated input costs and cautious consumer behaviour. The group's diversification and local manufacturing capability within its TFG Africa division is reportedly providing some resilience, with management actions focused on cost discipline and operational efficiencies to mitigate these headwinds where possible.
“The group maintains a sound balance sheet position, supported by committed banking facilities and prudent working capital management. Inventory in the group's largest division, TFG Africa, is expected to close within normal levels.”
The continued soft sales for TFG’s Australian market come as both its Tarocash and YD businesses are expected to require non-cash impairments.
This comes as trading conditions prove more challenging than anticipated, with macroeconomic conditions showing little improvement.
“Reflecting the more challenging outlook, our revised assumptions have required a reassessment of forward-looking cash flows and recoverable values,” the company shared. “Accordingly, the group expects to recognise non-cash impairments in the current period. These brand impairments may be reversed in future periods should trading conditions improve.”
For Tarocash and YD, TFG confirmed that both brands remain profitable, but noted that recent weak trading conditions, as well as the transfer of Tarocash’s traditional “big and tall” business to the group’s Johnny Bigg label, have led to likely impairments.
TFG told investors in February that the Australian business continues to generate EBITDA significantly above the A$43 million recorded when it was first acquired in FY2018, generating A$94 million in FY2025.
The impairment charges overall are believed to be valued up to R750 million (~A$66.8 million), with the charges expected to impact the group’s earnings per share by at least 20 per cent
The impairment charge has no impact on headline earnings per share.