South Africa's Massmart sees lower FY earnings, shares plunge

August 20, 2014
A shopper leaves the Game store in South Gate mall south of Johannesburg
A shopper leaves the Game store in South Gate mall south of Johannesburg September 27, 2010. REUTERS/Siphiwe Sibeko

JOHANNESBURG (Reuters) - Massmart Holdings, the South African unit of Wal-Mart Stores, said on Tuesday its first-half earnings fell as much as 29 percent, sending the retailer's shares almost 7 percent lower.

Massmart said in a statement it expected headline earnings of between 159.4 and 178 cents per share for the 26 weeks to June 29, compared with 225.2 cents a year earlier.

Headline EPS, the main measure of profit in South Africa, excludes certain one-time items.

The decline highlights the squeeze felt by cash-strapped consumers who are struggling with the rising cost of living in Africa's most developed economy.

Larger rival Shoprite has also been hit by low consumer spending. On Tuesday it reported its slowest profit growth in 15 years for the year to June.

Massmart's shares fell 6.7 percent at 136.80 rand.