Retail giant Pick n Pay has reported continued progress in its turnaround strategy, narrowing its losses significantly in the first half of the 2026 financial year, though it has acknowledged that a full-year loss remains likely.
In its interim results for the six months ended 31 August 2025, the group highlighted the successful execution of several strategic initiatives aimed at restoring profitability. These efforts have led to a headline loss reduction to R439 million, down from R804 million in the same period last year, a 45.3% improvement.
Key Drivers of Improvement
The improved performance was underpinned by a R227 million increase in trading profit, alongside a R537 million swing in net funding interest, reflecting the full benefit of the FY25 recapitalisation. These gains contributed to a 273.5% increase in group trading profit, which rose to R310 million.
- Group turnover grew by 4.9% to R58.8 billion, driven by:
- Boxer: +13.9% growth
- Pick n Pay segment: +0.1% growth (4.4% like-for-like)
- Gross profit margin expanded to 18.2%, up from 0.3%, led by recovery in the Pick n Pay segment.
- Other income increased by 4.5%
- Trading expenses rose by 4.8%, largely due to Boxer’s store expansion.
Boxer delivered a R931 million trading profit (+16.2%), while the Pick n Pay segment posted a R621 million trading loss, though this was a 13.5% improvement year-on-year.
Financial Metrics
- Loss before tax and capital items: R317 million (down 69.9% from R1.1 billion)
- Headline loss per share (HEPS): 59.77 cents (down from 136.60 cents)
- Basic loss per share (EPS): 67.53 cents (down from 140.83 cents)
- Net finance costs: Decreased by 44.8% to R627 million
The group attributed the increase in net lease interest to Boxer’s aggressive store rollout, partially offset by reductions in Pick n Pay’s lease obligations.
This is a vast improvement from the loss of R827 million in H1 FY25.
| Key Group Financial Indicators | 26 weeks to 31 August 2025 (H1 FY26) | 26 weeks to 25 August 2024 (H1 FY25) | % Improvement |
|---|---|---|---|
| Turnover | R58.8 billion | R56.1 billion | 4.9 |
| Trading profit | R310 million | R83 million | 273.5 |
| Trading profit margin | 0.5% | 0.1% | — |
| Loss before tax and capital items | (R317 million) | (R1 052 million) | 69.9 |
| Headline loss | (R439 million) | (R803 million) | 45.3 |
| Headline loss per share (HEPS) | (59.77 cents) | (136.60 cents) | 56.2 |
| Basic loss per share (EPS) | (67.53 cents) | (140.83 cents) | 52.0 |
Strategic Progress and Outlook
Pick n Pay said the first half of FY26 reflects steady progress in its profit recovery journey. Boxer continues to outperform, with its expansion strategy targeting long-term structural growth. The Pick n Pay segment also showed signs of recovery, with accelerated like-for-like sales growth and gross margin improvements.
The group confirmed the successful execution of its plan to exit unprofitable stores, with 65 loss-making, company-owned supermarkets expected to be closed or converted by the end of FY26. This marks the conclusion of a key phase in its strategic reset.
Pick n Pay Clothing reached a milestone with the opening of its 400th stand-alone store, achieving 12% turnover growth (7.5% like-for-like). Online sales also posted strong double-digit growth, reflecting the group’s expanding digital footprint.
Despite these gains, the group acknowledged that its core Pick n Pay business remains unprofitable at the trading profit level. Like-for-like sales growth in company-owned supermarkets continues to lag behind operating cost growth, underscoring the challenges ahead.
The group stated:
The multi-year journey of returning Pick n Pay to a profitable and future-fit business continues to be tackled in a purposeful and methodical manner.
Looking ahead, Pick n Pay expects the segment’s full-year trading loss to be broadly in line with FY25, as it continues to invest in critical retail skills and operational excellence to reach break-even after lease interest.
