South Africa’s leading health and beauty retailer, Clicks Group, has announced a 13.7% uplift in full-year headline earnings, propelled by a strategic expansion of its store footprint to exceed 990 outlets during the period. According to the company’s latest financial disclosures, headline earnings climbed to R3.2 billion for the year ending August, up from R2.8 billion the previous year, marking a 14.1% increase in headline earnings per share to 1,362 cents. This performance underscores the resilience of the retail sector in a challenging economic climate, as reported by Reuters.
The group’s proactive growth initiatives played a pivotal role, with a net addition of 55 stores and the expansion of its national pharmacy network to 780 locations through 60 new openings. Group turnover rose 5.3% to R47.8 billion, while retail turnover—encompassing Clicks, UniCare, The Body Shop, and Sorbet corporate outlets—advanced by 6%. Trading profit surged 12.1% to R4.7 billion, with the trading margin expanding by 60 basis points to 9.8%, reflecting enhanced operational efficiencies and cost controls, as detailed in CNBC Africa.
In recognition of these achievements, the board declared a final dividend of 648 cents per share, elevating the full-year payout by 14.2% to 886 cents per share. This dividend hike aligns with the company’s commitment to shareholder returns, having distributed over R5 billion in dividends across the past five years, according to Clicks Group’s investor relations update. The expansion efforts not only bolstered physical presence but also supported digital integration, with online sales contributing 12% to total retail turnover, up from 10% the prior year, as noted in the half-year results published by Business Day.
Despite positive macroeconomic signals in South Africa, such as easing inflation and interest rate cuts, the group acknowledged persistent pressures on consumer sentiment and discretionary spending. Front shop sales, which include beauty and personal care items, grew by 7.2%, driven by strong demand in private label products that now account for 32% of sales—exceeding the 30% target set for the year. Pharmacy sales, meanwhile, increased by 4.8%, benefiting from higher volumes in chronic medications and over-the-counter essentials, per Engineering News-Record.
Looking ahead to the 2026 financial year, management plans to capitalise on recent investments in Sorbet and UniCare franchises, alongside the rollout of the LEAP pharmacy management system, which has streamlined inventory and patient services across 85% of stores. The group intends to open between 40 and 50 new stores and a similar number of pharmacies, advancing towards its medium-term ambition of reaching 1,200 outlets nationwide. Over the longer horizon, 10 to 15 specialised UniCare pharmacies are slated for development, targeting underserved communities with tailored health solutions, as outlined in Clicks Group’s strategic overview.
Private label offerings continue to anchor the group’s differentiation strategy, with recent momentum in these and exclusive brands projected to drive a 35% contribution to front shop sales in the medium term. This focus has yielded double-digit growth in categories like skincare and wellness supplements, outpacing market averages by 5 percentage points, according to IOL Business. Complementing this, the company’s omni-channel enhancements—integrating in-store, app-based, and delivery options—have boosted customer loyalty, with ClubCard membership surpassing 10 million active users, who redeemed R500 million in rewards last year, as reported by MyBroadband.
To fuel these ambitions, capital expenditure is budgeted at R1.256 billion for the coming year, allocating R662 million towards new stores, pharmacies, and the refurbishment of 70 to 80 existing sites. An additional R594 million will target supply chain upgrades, IT infrastructure, and logistics enhancements, including automation at distribution centres to reduce costs by 15%. These investments align with broader industry trends, where South African retailers are ramping up capex by an average of 8% annually to combat e-commerce competition from global players like Amazon, per Bloomberg.
Clicks Group’s steadfast execution in a subdued trading environment positions it well for sustained growth, even as it monitors risks from potential VAT hikes and supply chain disruptions. With a return on equity climbing to 46%, the retailer remains a defensive staple in investor portfolios, as affirmed by recent analyst upgrades from firms like Investec, which forecast 12% to 15% earnings growth through 2027, as covered in Financial Mail.