Fashion comes at a hefty price tag nowadays, evident by MR Price Group Limited’s (JSE: MRP) latest preliminary results for FY2023.
The fashion retailer’s lacklustre report showed the impact of higher interest rates which dampened consumer spending, and the astronomical cost of loadshedding on its business.
The retailer reported lower-than-expected group revenue of 17% to R32.9 billion, attributed to the inclusion of the acquisition of 70% of the Studio 88 Group. Basic and headline earnings per share were down 6.8% and 6.0%, respectively, while diluted headline earnings per share decreased 6.0% against a demanding base of 19.5%. But that was not it; the company also reported it lost approximately R1 billion in revenue due to electricity constraints, resulting in 318 000 trading hours lost due to loadshedding.
Technicals
Looking at the daily chart of MR Price, we can see that the price action has been under pressure and traded lower in a descending channel from April 2022, still waiting on a breakout.
Looking closer at the 4H chart, we can see that high volume candle after the announcement, which has retraced somewhat during the day. If the price action can remain above the 61.8 Fib level (solid black line), then the possibility exists that the upper boundaries of the descending channel could be tested. This will bring the significant resistance level at R152.29 (green line) into focus which needs to see the share price close above to negate the downward trend.
If the golden Fib ratio does not hold, we could expect the trend to continue lower, to the R122.90 support (red line) and then the lower levels of the channel.
Sources: MR Price Group Limited, JSE SENS, Business Day, TradingView.
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