As at 20 July 2026

Executive Summary

Key highlights

In this report we review MRP’s FY26 results released in June 2026 and assess the impact on our outlook:

Financial results at a glance:

• Group revenue was up 4.2% with Apparel revenue (accounting for 79.6% of group revenue) up 4.3% for the period – above the Retailer’s Liaison Committee’s 4% growth. Like-for-like sales in Apparel grew by 1.1% for the period, with flat unit growth and price inflation of 4%.

• Homeware revenue (making up 16.8% of group revenue) expanded by 3.8%. Like-for-like sales were up by 1.8%, while unit growth and price inflation both grew by of 1.9%.

• Telecoms revenue (totalling 3.6% of group revenue) advanced by 10.3% for the period, with like-for-like sales declining by 3.1%, unit growth up by 3.9%, and price inflation of 7.4%.

• The group’s GP margin increased by 70 bps, to 41.2%, despite a highly promotional period, while remaining within its medium-term target range of between 40%-42%. The Apparel GP margin increased by 60 bps to 41.8% and the Homeware GP margin by 50 bps to 42.8%, both within their respective medium-term margin target ranges, while the Telecoms GP margin increased by 70 bps to 20.7%, exceeding its target range of 18%-20%.

• All group normalised results exclude the once-off transaction cost of R217 million related to the acquisition of Pegasus Group Holding, which trades as the retail businesses of NKD Group. As the acquisition only became effective after year-end, the results do not include NKD’s operating performance.

• The overall group results were softer in the second half of the year, which had a higher prior period base driven by two-pot withdrawals providing a short-term boost.

• Group operating profit was up 4.3%, with normalised operating profit rising by 8%. On a reported basis, the group operating profit margin was flat at 14.2% and up by 50 bps on a normalised basis, advancing to 14.7%. Employment costs were up 7.9% for the period and account for approximately 41.7% of operating expenses.

• Group EBITDA rose by 5% on a reported basis and expanded by 7.4% on a normalised basis.

• Diluted headline earnings per share were up by 2.4% on a reported basis and 8% on a normalised basis.

• Dividends per share grew by 2.1% with a 63% payout ratio maintained for the period.

Analyst thesis

Our recommendation is based on:

• Trading at historically low valuations on a P:E basis.

• Positioned to benefit from any positive changes in consumer affordability over the medium- to long-term through the easing of inflation and the central bank pivoting back to a rate-cutting cycle.

• An expectation of continued long-term growth and market share protection, driven by organic growth (store growth and subdivisions such as Mr Price Kids and Mr Price Cellular) and the performance of acquired businesses (Studio 88, Power Fashion, NKD, etc.), supported by relatively low debt levels compared to its peers.

• Expansion into Europe through the acquisition of NKD provides potential growth opportunities but also execution risks that will need to be managed to achieve the required return on investment. Although debt was used to purchase the business, management plans to reduce the level and cost of debt in Europe, with the full benefit evident by FY28.

• MRP demonstrates relatively strong business fundamentals and, when combined with low valuations and the defensive low-value proposition during consumer affordability concerns, is placed in a favourable position to be seen as one of the preferred retailers by consumers.