JOHANNESBURG (Reuters) - Shares of South African retailer Massmart (MSMJ.J) tumbled more than 3 percent on Monday, after the Wal-Mart (WMT.N) unit warned it may fall short of its profit target this year, squeezed by weak consumer spending.
Massmart, the country’s No.2 retailer by value, said sales increased 10.3 percent in the 14 weeks to end-March adding growth may be under pressure for the rest of its fiscal year.
“If the current sales trends continue, it will be difficult to meet our objective, which is to achieve trading profit growth equal to sales growth,” it said in a statement.
Shares in Massmart slid 3.3 percent to 191.99 rand, booking their biggest daily percentage decline in more than 20 months.
Massmart’s trading statement is likely to add to worries that retailers -- the worst stock market performers this year after a rallying for the two previous years -- are still priced for more than they can deliver.
Reporting by Tiisetso Motsoeneng; editing by David Dolan