Massmart rings up higher sales. The wholesaler and retail says sales have mostly improved since mid-year but new accounting standards will distort its results.

After a flat first half, Massmart says sales picked up in the subsequent 10-week period, with the exception of hardware sales.

In an update ahead of an investor visit to its stores in the Zambian capital, Lusaka, today, the wholesaler and retailer said sales growth had improved since its previous update for the 33 weeks to 19 August. It said total like-on-like sales for the 43 weeks to 28 October increased by 3.5% to R70.5 billion, with comparable store sales increasing by 1.7% and product deflation of about 0.4%. For the first half of its financial year, the group reported comparable store sales of 0.2%.

All four divisions and the four major product categories reported higher sales growth, apart from Massbuild and the DIY category where sales slowed slightly. Its SA stores grew sales by 3.5%, with comparable sales up by 2%. Sales outside South Africa grew 5% and were 0.1% softer on a comparable basis in constant currencies. However, in rand sales rose by a smaller 3.4% in total and declined by 1.8% on a comparable basis.

Massmart said the adoption of the IFRS 15 accounting standard would distort full-year sales numbers as the accounting standard uses the 'modified retrospective approach', which requires that the comparative period not be restated. On that basis, it said 43-week were down on all metrics.

Its shares rose 2% to R101.95 yesterday.