Weekly Earnings Outlook

As earning season wind’s down this week, investors can keep their eyes peeled for releases from MultiChoice Group, Foschini Group Ltd and DocuSign.

Update 12 June 2023

Earnings Surpass, Sales Fall Short: Toro, SPAR, GDP Update

Surpassing expectations, the South African economy defied a technical recession by experiencing a 0.4% quarter-on-quarter expansion in the first quarter of 2023. Meanwhile, the SPAR Group, a leading wholesaler and distributor, released its trading update for the first half of 2023, reporting overall sales growth but facing profitability challenges in various regions. In this update, we also delve into Toro Co’s fiscal second-quarter performance, where profit increased but sales fell short of expectations.

Q23 GDP: SA Economy escapes a recession but still stuck in the lowest gear

The economy showcased unexpected resilience as it rebounded in the first quarter of 2023, defying expectations of a mild technical recession. After a revised contraction of 1.1% in the previous quarter, the economy expanded by 0.4% q/q, aligning closely with the Bloomberg consensus forecast of 0.3% q/q.

Despite the positive GDP expansion signaling a return to pre-pandemic levels, the economy remains burdened by the enduring repercussions of the pandemic and the disturbances arising from the social unrest witnessed in July 2021. The challenges of hard power shortages, logistical hurdles, elevated inflation, and rising interest rates have kept the economy sluggishly, with more noticeable fluctuations close to zero from one quarter to another. This fragility makes the economy susceptible to potential economic shocks.

A noteworthy aspect is the expansion of all energy-intensive sectors, even amid intensified load-shedding during the first quarter relative to the previous quarter. This trend indicates a potential shift towards corporate innovation and reduced dependence on the electricity grid for production sustainability. It is becoming evident that real GDP and electricity usage, as measured by Eskom and Statistics South Africa, are gradually decoupling.


The SPAR Group, a prominent wholesaler and distributor of goods, released its first-half 2023 trading update. Despite challenges, the SPAR Group reported overall sales growth of 7.9%.

However, the wholesale liquor division, TOPS, experienced a decline in turnover of 1.9% as demand normalized following the post-COVID-19 surge.

The SPAR Group operates in various regions, including Ireland, Switzerland, and Poland. In Ireland and South West England, subsidiary BWG achieved an impressive 8.8% growth in turnover (in ZAR: +15.1%). This growth was attributed to strong performances across all retail brands, a hospitality sector recovery, and the successful integration of small wholesale businesses.

Toro Co (NYSE: TTC)

Toro, a manufacturer of lawnmowers and other equipment, reported positive financial results in its fiscal second quarter, although its sales fell short of analyst expectations. The company achieved a profit of $167.5 million, equivalent to $1.59 per share, for the quarter ending on May 5th, 2023, demonstrating notable growth compared to the $131.1 million recorded previously.

The company’s Chief Executive, Richard Olson, attributed the positive results to solid demand and improvements in the supply chain within the professional segment. However, sales volumes and earnings in Toro’s residential segment faced challenges due to unfavorable weather patterns and macroeconomic factors.

Sources: The Wall Street Journal, Business Live, News24

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