Pepkor, a subsidiary of Steinhoff International Holdings (SIHNV), has reported that its half-yearly (H1) earnings dropped 11.7% in fiscal 2023 (FY23).

In the six months ending 31 March 2023, the company’s revenue was R43.8bn ($2.21bn), up 4.3% from the corresponding period a year ago.

Pepkor’s operating profit before capital items dropped 9.8% to R5.12bn ($258.8m) during this period.

The clothing, electronics and furniture retailer also reported declining earnings per share (EPS) by 10.0% to R81.1 ($4.10).

The company’s Avenida business in Brazil registered better than expected performance, while Ackermans posted poor results driven by the suboptimal merchandise mix in its summer 2022 range.

In a statement, the company said: “Pepkor’s performance was negatively impacted as its core customer continues to face a constrained consumer environment. Feedback from our customers indicates that they have no choice but to prioritise spending on necessities.

“Customers’ ability to earn an income and their shopping behaviour is also impacted by unprecedented levels of electricity load shedding.

“The group continued to implement initiatives to mitigate the impact of outages, increasing the proportion of the group’s store base with alternative power sources to 74%.”

During the period, sales for Pepkor’s clothing and general merchandise segment sales increased by 7.0% and like-for-like sales decreased by 2.0%.

The company’s PEP HOME stand-alone format, which has 374 stores, posted strong sales growth of 18.8% in H1 FY23.

As part of business optimisation, Pepkor closed its Dealz discount variety brand and planned the exit of PEP Africa from Nigeria.

The retailer opened 168 new stores in H1 FY23, ending the quarter with a network of 5,929 stores.

Recently, SIHNV received creditors’ approval for its debt restructuring plan.