Pick n Pay cuts headline loss 31.9% to 299 million rand in first half
Key Facts
Pick n Pay reported a 31.9% fall in its headline loss to 299 million rand for the 26 weeks ended August 30, 2026, compared with a loss of 439 million rand in the same period a year earlier. Operating profit rose to 490 million rand from 310 million, an annual increase of 58.1%. The company attributed the improvement in operating profit to higher profits at Boxer and lower losses in its core Pick n Pay segment. The results reflect progress in its transformation plan, while the core segment continues to post a trading loss, albeit a smaller one. The company published its interim results on October 26, 2026.
Boxer contributed to the improvement with a 75 million rand increase in trading profit, which reached 1.0 billion rand in the first half. By contrast, the trading loss in the Pick n Pay segment narrowed by 105 million rand to about 0.5 billion rand. The company said the segment’s trading loss fell 16.9% year on year. It attributed the decline to a wider gross profit margin and contained growth in operating expenses. The divergence highlights the group’s reliance on Boxer’s strength for its operating improvement, alongside gradual progress in Pick n Pay’s core business.
The group’s gross profit margin widened 0.7 percentage points to 18.8% in the first half. Operating expenses rose 4.5%, driven by the expansion of Boxer stores, the company said. This means network expansion was accompanied by higher expenses, while the gross margin improved. The company said the improvement in the Pick n Pay segment’s margin, alongside contained growth in its operating expenses, helped reduce the trading loss. These indicators place improved operating performance at the heart of the explanation for the narrower loss, rather than attributing it solely to sales growth.
The group had net cash of 10.0 billion rand at the end of the first half, including 7.7 billion rand in the Pick n Pay segment. These balances provide financial backing for the group’s ongoing transformation, while its core business continues to report a trading loss. Pick n Pay had completed restructuring consultations after reaching an agreement with its main union, according to Reuters. The process began in May 2026. The step comes against the backdrop of restructuring that preceded the interim results.
The company said an improved customer experience supports like-for-like sales growth, and that it is targeting trading profit breakeven after lease interest in FY29. It added that further benefits from the transformation plan are expected to emerge over the next two and a half years. But higher fuel prices since May 2026 have weighed, the company said, on customer spending and its cost base. It also said rising oil, food and logistics costs make the outlook for the rest of FY27 less clear. In the four weeks after the period ended, like-for-like sales growth at Pick n Pay supermarkets in South Africa was slightly above the first-half rate.
Pick n Pay shares rose 4.17% in trading cited by an Investing.com report on October 26, from 2,112 to 2,200 rand. The investor relations calendar scheduled publication of the interim results for October 26, followed by an investor roadshow from October 27 to 30. The roadshow gives the company an opportunity to present the interim results to investors after their announcement. Its stated objectives focus on continuing the transformation and reaching the targeted breakeven in FY29. The company said pressure from fuel and operating costs leaves the outlook for the rest of FY27 unclear.