Furniture retailing group Lewis ended 2019 on a high note, lifting sales volumes by some 7% in the last quarter, in an economy where many retailers were battered by decreased consumer spending. The news of defying an ailing economy saw the share price rally nearly 8% on the back of its trading update, which was published on the JSE stock exchange news service on Tuesday afternoon.
Lewis' share opened at R29.66 on Tuesday and was trading at R30.49 shortly before the release of its trading update for the nine months ended December, 31, 2019 at 15:00. The stock was up 7.86% at R31.98. A year ago the share was trading around the same levels.
By 17:00, shares were trading at R30.55 apiece.
The group, whose furniture brands include Lewis, Best Home and Electric and Beares, has more than 780 furniture stores in SA and neighbouring countries. It attributed some of the increase in merchandise sale to Black Friday, but even disregarding these sales, its outlets grew sales by 5.6% for the quarter and 4.0% for the nine months to December.
Its other revenue streams, such as finance charges, initiation fees and insurance premiums, increased by 5.2% for the quarter and 5.6% for the nine-month period - a stark contrast to the previous year's annual results where other revenue declined.
"Debtor costs continued to show an improving trend, supported by strong collections and a resultant improvement in collection rates, reducing by 0.8% for the quarter and 0.6% for the nine months," the retailer noted.
Lewis attributed its performance to its strategy to diversify its offering across target markets.