Clicks to Open 10 New Concept Stores in South Africa as Retailer Hits 1000 Outlets

Clicks will launch new concept stores across South Africa after reaching over 1 000 outlets during the first half of the 2026 financial year. The healthcare retailer plans to pilot 10 differentiated concept stores in the second half of the year as part of its ongoing expansion strategy.

In its interim financial results for the six months ended 28 February 2026, the group said the consumer environment is expected to remain under pressure in the second half due to rising fuel prices resulting from the Iran war and associated inflationary pressures constraining household spending. Despite these headwinds, Clicks remains committed to its medium-term financial targets and its store target of 1 200 outlets.

Expansion and Capital Investment

Clicks plans to open 40 to 50 new stores and 40 to 50 new pharmacies in the 2026 financial year. Capital expenditure of R1.3 billion is planned for the year, including R663 million for new stores and pharmacies, as well as the refurbishment of 80 to 90 existing stores.

The group's subsidiary, United Pharmaceutical Distributors (UPD), recently acquired a medical consumables business and will be launching this offering to customers.

Financial Performance

Despite constrained consumer spending and internal systems challenges, Clicks delivered a resilient performance. According to the financial table:

Group turnover increased 7.4% to R24.9 billion, with retail turnover — including Clicks, UniCare, The Body Shop, and Sorbet corporate stores — rising 5.4%. Turnover in comparable stores grew 3.1%, while selling price inflation averaged 2.3% for the six-month period. Total income grew 6.5% to R7.6 billion.

Headline earnings grew 6.4% to R1.5 billion, with headline earnings per share increasing 8.1% to 653 cents, benefiting from a share buyback. The group returned R2.3 billion to shareholders through dividend payments of R1.5 billion and share buybacks of R752 million.

Operational Highlights

Pharmacy sales increased 8.6%, with retail pharmacy market share strengthening to 24.9% from 24.2% in the prior period. Clicks ClubCard grew active membership by 800 000 to 12.9 million, accounting for 83.7% of Clicks' sales. Loyalty members received R527 million in cashback rewards during the interim period.

The group opened its 1 000th store during the period, bringing its footprint to 1 003 outlets, while the national pharmacy network expanded to 795.

However, retail turnover was impacted by delays in the implementation of the Clicks distribution centre in Cape Town, reducing product availability in Western Cape and Eastern Cape stores, notably during the festive season. Management estimates the systems delay reduced retail turnover by approximately R175 million (0.9% of retail sales). Product availability improved steadily and returned to targeted levels by the end of February.

Outlook

The group's directors forecast that diluted headline earnings per share for the financial year ending 31 August 2026 will increase by between 4% and 9% relative to the 2025 financial year.

Market Sentiment: 

The sentiment is cautiously positive, reflecting resilient operational performance despite significant headwinds. The 7.4% turnover growth and 6.4% headline earnings increase demonstrate that Clicks continues to execute effectively in a constrained consumer environment. The planned 10 new concept stores signal innovation and differentiation in a competitive retail landscape, while the medium-term target of 1 200 stores provides a clear growth runway. The R1.3 billion capex plan confirms management's confidence in long-term demand. The systems delay at the Cape Town distribution centre is a disappointment — costing an estimated R175 million in retail turnover—but the issue has been resolved and is a one-off operational setback rather than a strategic concern. The 32.5% increase in net financing costs reflects higher interest rates, which is a macro headwind beyond the company's control. The 8.1% HEPS growth, supported by share buybacks, demonstrates capital allocation discipline and commitment to shareholder returns. The 4-9% full-year HEPS guidance is reasonable given the uncertain consumer outlook. Clicks remains a high-quality defensive retail play with strong pharmacy and loyalty tailwinds, though the second half may see increased pressure from fuel prices and inflation.

Disclaimer:
This content has been generated using AI technology and is intended for informational purposes only. While efforts have been made to ensure accuracy and relevance, this text should not be considered professional advice or an official statement. Always verify information from authoritative sources before making any decisions. This is not financial advice.