Famous Brands Earnings Took Bite-Sized Hit

Famous Brands Limited (JSE: FBR) has navigated a narrow trajectory after unveiling its recent interim earnings report last month. Challenges stemming from increased operational costs amid persistent power cuts and inflationary pressures shadowed the report, impacting profits. Notably, headline earnings per share dipped by 7%, landing at 199 cents from 215 cents. The strain emerged from heightened spending demands on alternative power sources and reduced consumer expenditure on discretionary goods—among them, their renowned brands like Steers, Debonairs Pizza, Fishaways, and Wimpy. 

However, the consumer’s resilience surprised management. Despite economic strains, people persist in frequenting restaurants, possibly due to limited home cooking opportunities amid power cuts. To sway discretionary spending towards convenient food alternatives, expect enticing value deals, discounts, and loyalty programs to take centre stage. 

Although the interim operating profit experienced a 6% decline to R371M, the company’s prudent dividend coverage allowed for a boost in dividends to R1.38 per share. This strategic move reflects their commitment to maintaining investor satisfaction and financial stability. 


On the weekly chart, a descending triangle has formed, with the share price underpinned by psychological support at R57.09. However, the 50-SMA (blue line) has crossed above the 25-SMA (green line), indicating a shift in short-term momentum, making resistance at R59.99 challenging to breach.  

With the descending triangle being a continuation pattern, a breakdown is possible should the resistance at R59.99 prevent any upside above the multiple SMAs. From R57.09, the first potential level of support is established at R55.39, where buyers could be found. Should a high volume breakdown result in a crossing below this support, the share price could trickle down to the demand zone around R51.93 in search of buyers. 

Conversely, a breakout above resistance at R59.99 could trigger an upturn if the share price crosses multiple SMAs. The dynamic resistance of the triangle could then be the last line of defence, preventing a breakout toward higher resistance at R65.18. A rally like this could bring R67.82 and R70.00 into play in the longer term.  


Despite its earnings faltering last month, Famous Brands has moved in a narrow range, trading sideways as investors remain unsure of the company’s prospects. However, support at R57.09 could be crucial in keeping the share price afloat, as a breakdown below this support could trigger a steeper downtrend as we advance.  

Sources: Koyfin, Tradingview, Famous Brands Limited 

Piece written by Tiaan van Aswegen, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.