Country Road Group warns on outlook despite sales rise
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The news: Country Road Group’s South African owner Woolworths Holdings warned that inflationary pressures in Australia and its recent interest rate rise are likely to weaken consumer confidence, tempering any potential recovery in retail spending.
The numbers: The group said that against the high-cost inflationary backdrop, Country Road’s sales grew by 2.3% and by 2.5% on a comparable-store basis, but gross profit margin was under pressure during 1H26 due to higher promotional activity and deliberate initiatives to clear excess inventory.
Expenses were maintained in line with last year despite the higher cost-of-doing business, resulting in adjusted operating profit of $14.8 million — 4.2% higher than last year — returned an operating profit margin of 2.6%.
The context: Country Road Group, which owns the Witchery, Politix, Mimco and Trenery brands, said following a strong Black Friday and Cyber Monday trading period in November, Australia’s December retail trading performance proved softer than anticipated. This meant Country Road’s sales growth slowed to just 1% during the final seven weeks of the period.
Country Road said that the group’s efforts benefitted from the repositioning of the brand portfolio and the successful restructuring of the group’s operating model.
The source: Woolworths Holdings
