Managing a constant headwind: The Foschini Group Limited | Europe

研报英文原文证据摘录

Managing a constant headwind: The Foschini Group Limited | Europe

IdeaM

Risk Reward – The Foschini Group Limited (TFGJ.J)

KEY EARNINGS INPUTS

Drivers Mar 2026 Mar 2027e Mar 2028e Mar 2029e

ROIC (%) 7.6 7.3 8.0 8.5

Gross Margin (%) 48.2 48.4 48.6 49.0

Operating Margin (%) 7.3 6.9 7.3 7.6

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Relatively low EBIT margins in SA Business RISKS TO UPSIDE FY Mar 2027e

could present a future growth opportunity if Reduced promotional activity

TFG can improve operating efficiencies. Improved performance for Phase Eight in the Sales / 68,617

Credit growth UK Revenue 63,533 70,722

Improved performance of Jet Lower bad debts due to improved consumer (ZAR, mn) 65,066

Discretionary sales for Tapestry credit conditions

Store expansion Decisive cost reduction strategies for all

11,271

regions EBITDA

11,078 13,563

GLOBAL REVENUE EXPOSURE RISKS TO DOWNSIDE (ZAR, mn) 12,179

Prolonged weak SA economic cycle

APAC, ex Japan, Mainland 10-20% China and India Increased competition, lost market share

10-20% UK Sales declines and GP margin pressure in Net income 1,895 3,770

60-70% MEA Australian and UK businesses (ZAR, mn)

Inability to close stores and cut costs due to 2,593

contractual agreements

Source: Morgan Stanley Research Estimate

View explanation of regional hierarchies here EPS

OWNERSHIP POSITIONING (ZAc) 589 1,157

Inst. Owners, % Active 80.6%

HF Sector Long/Short Ratio 1.6x Mean Morgan Stanley Estimates

HF Sector Net Exposure 7.6% Source: Refinitiv, Morgan Stanley Research

Refinitiv; MSPB Content. Includes certain hedge fund

exposures held with MSPB. Information may be

inconsistent with or may not reflect broader market

trends. Long/Short Ratio = Long Exposure / Short

exposure. Sector % of Total Net Exposure = (For a