South African pharmacy chain Dis-Chem’s earnings missed analyst estimates after industrial action affected performance in the final quarter of the year, according to a report published by Reuters.
The drugstore operator was expected to report earnings of 87 cents per share for the year ended February 28 2019 but instead came in at 85.4 cents per share, a rise of 7.4 percent versus FY2018 but impacted to the tune of 4.2cps by the strike.
Around 2,300 employees took part in the strike action from November 16, 2018, the majority of which were from wholesale operations.
“It is pleasing to continue to see market share gains across all of our core categories,” commented Chief Executive, Ivan Saltzman. “With constrained consumers continually searching for value offerings we believe that these market share gains are driven by our everyday low-price strategy coupled with aggressive promotional activity, our trusted in-store service and the availability of choice for our consumers, while we continue to focus on private label and exclusive brands…
“Unfortunately, the industrial action which began mid-November last year heavily impacted the Group’s performance in the current financial period. The demands by the union were unreasonable considering the economic climate and the nature of the industry in which we operate. We are pleased that the industrial action has been concluded and our focus is now on continuing to develop a productive employer/employee relationship, improving wholesale productivity levels and cost efficiency, as well as optimising the levels of stock holding in the Group which the industrial action necessitated.”