In today's Taking Stock, Lululemon shares plunged over 12% in after-hours trading after the company issued a sharply weaker full-year outlook, citing a $240m tariff-related hit to profits.
South Africa
The Top 40 index shed 1.29% yesterday to reach 92,976.2 points, while the All Share index lost 1.07% to close the day at 100,432.9 points. ArcelorMittal’s talks to sell its South African unit to the state-owned IDC have reportedly stalled over valuation gaps, though a resolution remains possible before the 30 September due diligence deadline. Meanwhile, Treasury has withdrawn a draft tax amendment that threatened preference share funding structures, acknowledging its dampening effect on deal-making. The Road Accident Fund faces liquidity pressures following a court ruling requiring claims be settled within 14 days rather than six months. Separately, Johnstone Makhubu has emerged as frontrunner to replace Edward Kieswetter as SARS commissioner when he steps down.
Europe
European equities advanced, with the STOXX 600 up 0.66% as expectations of a Fed rate cut and softer bond yields buoyed sentiment. Gains were led by telecoms and media stocks, while political risk in France remains elevated ahead of a confidence vote next week. Germany finalised its €502.5bn 2025 budget, prioritising record investment and defence commitments. Eurostat data showed eurozone retail sales fell 0.5% month-on-month in July, underperforming forecasts, though annual growth was 2.2%. Investors continue to weigh consumption resilience against headwinds from U.S. tariffs and political uncertainty across Europe.
United States
The S&P 500 hit a record close, buoyed by Amazon (+4.3%), Meta (+1.6%) and Broadcom (+1.2%) ahead of its earnings release. Labour data showed jobless claims rose to 237,000, with private hiring slowing, reinforcing expectations of a Fed rate cut, now priced at 95% probability. Consumer discretionary led sector gains, while JetBlue rallied on a partnership with Amazon’s Project Kuiper. Salesforce fell 4.9% on weak revenue guidance, highlighting challenges in AI monetisation. Investors remain cautious given September’s historically weak seasonality, though easing rate expectations are currently supportive of equity valuations.
Asia
Asian markets traded higher after President Trump formalised a reduction in U.S. tariffs on Japanese autos to 15% and confirmed $550bn in Japanese investment commitments. Japan’s July data reflected modest recovery, with household spending up 1.4% year-on-year, though below forecasts, and real wages turning positive for the first time in seven months. While consumer spending improved for a third consecutive month, elevated inflation continues to pressure households and complicates the Bank of Japan’s path towards policy normalisation. The latest data suggest a delicate balancing act between growth recovery and inflation risks.
Currencies
The rand weakened against the dollar after softer U.S. private payroll data reinforced expectations of Fed rate cuts, strengthening the greenback. The dollar extended gains on Thursday and was on track for a second consecutive weekly rise, supported by stabilising bond markets and cautious trading ahead of U.S. jobs data. With investors reluctant to take large positions before the payrolls release, FX markets remain range-bound. Near-term direction for emerging market currencies such as the rand will hinge on the Fed’s policy trajectory and evolving risk appetite.
Commodities
Gold prices retreated after a record rally as traders awaited U.S. payrolls data for policy direction, though Goldman Sachs noted potential for bullion to approach $5,000/oz should Fed independence come under threat. Oil prices eased 1% to a two-week low, pressured by a surprise U.S. inventory build and expectations of higher OPEC+ output. Geopolitical focus sharpened after President Trump urged Europe to halt Russian oil purchases and increase economic pressure on China during a call with President Zelensky, signalling U.S. intent to shift responsibility for Ukraine’s conflict resolution toward European allies.
Anglo American plc (AGL) -0.87%
Anglo American has completed the accelerated bookbuild offering of its entire remaining 19.9% stake in Valterra Platinum (formerly Anglo American Platinum), disposing of c.52.2m shares at ZAR845 per share. The transaction generated proceeds of ZAR44.1 billion (c.USD2.5 billion) for Anglo American, with settlement expected around 9 September 2025 on the Johannesburg Stock Exchange. Valterra Platinum itself is not a participant in the placing and will not benefit from the proceeds. The exit follows the May 2025 demerger and reflects Anglo American’s strategic repositioning, unlocking liquidity and providing additional balance sheet flexibility for capital allocation.
African Rainbow Minerals Limited (ARI) -5.45%
African Rainbow Minerals has issued a trading statement for the year ended 30 June 2025, guiding a sharp earnings contraction. Headline earnings are expected to fall 45–55% year-on-year to between R2.29 billion and R2.79 billion, driven primarily by weaker realised export iron ore prices and higher mechanised development costs at Bokoni. Headline EPS is forecast at 1,166–1,425 cents versus 2,591 cents in FY24. Basic earnings are expected to decline 85–95% to R157–472 million, reflecting a R2.2 billion impairment at Bokoni. Results are scheduled for release on 5 September 2025.
Sanlam Limited (SLM) -3.49%
Sanlam delivered resilient FY2025 results, with net result from financial services rising 14% to R8.1 billion (15% per share) and 20% on a normalised basis, supported by strong insurance and credit businesses. Net operational earnings grew 15% to R9.3 billion, while headline EPS slipped 2% and attributable EPS rose 3%, reflecting fewer one-offs versus FY2024. New business volumes advanced 7% to R218 billion, though life insurance VNB fell 18% due to structural changes. Net client cash flows more than doubled to R48.5 billion. GEV per share reached R84.12, with adjusted annualised RoGEV of 15.4%, above the 14.7% hurdle.
Fortress Real Estate Investments Limited (FFB) -0.05%
Fortress delivered strong FY2025 results underpinned by its logistics and retail portfolio. Property valuations rose 6.5% year-on-year, supported by renewed investor appetite, while shares narrowed their discount to NAV from over 20% to 10%. Logistics assets, 70% of which were internally developed, continue to anchor growth, while the retail portfolio delivered like-for-like NOI growth of 9.4%, well ahead of inflation. Distributable earnings are forecast to grow 6–7.5% in FY2026. The group declared total distributions of 162.44 cents per share, up 9.4%, with a final dividend of 86.29 cents payable in cash or NEPI Rockcastle shares.
Pan African Resources plc (PAN) -2.20%
Pan African Resources expects a strong uplift in earnings for FY2025, with EPS guided 68–78% higher at 6.95–7.37 US cents and HEPS up 37–47% to 5.68–6.10 US cents. Revenue rose 44.5%, driven by a 35.7% increase in the average realised gold price to US$2,735/oz and a 6.5% rise in gold sales to 196,926oz. Results also include a gain on the Tennant Mines acquisition, excluded from HEPS. Hedging contracts reduced profitability by c.US$32m, but the group is fully unhedged from July 2025. FY2026 production is forecast at 275–292koz, supported by new MTR and Tennant contributions. Results are due 10 September.
Lululemon Athletica Inc. (LULU) +3.81%
Lululemon shares plunged over 12% in after-hours trading after the company issued a sharply weaker full-year outlook, citing a $240m tariff-related hit to profits. FY EPS is now guided at $12.77–$12.97 versus Wall Street’s $14.45, with revenue expected at $10.85–$11bn, below consensus. Q2 EPS of $3.10 beat forecasts, but revenue of $2.53bn missed slightly, with comparable sales up just 1%. Gross margin fell to 58.5% and operating margin to 20.7%. CEO Calvin McDonald highlighted stale U.S. product lines, particularly lounge and social categories, as a key drag on performance.
Kroger Company (KR) -0.53%
Kroger is eliminating nearly 1,000 corporate roles, including 200 in its Cincinnati headquarters region, as part of its ongoing cost-cutting drive. The move follows job cuts earlier in 2025 and June’s announcement of 60 store closures, representing about 2% of the group’s U.S. footprint. Interim CEO Ron Sargent said the restructuring aims to simplify operations and free capital for price reductions, store improvements, and additional staffing hours. Despite rationalisation, Kroger reaffirmed FY2025 capital expenditure of $3.6–$3.8bn, with investment directed towards new store builds, refurbishments, and expansion initiatives.
Broadcom Inc. (AVGO) +1.23%
Broadcom shares rose ~4% in after-hours trade after delivering Q3 results well ahead of forecasts and announcing a $10bn custom AI chip order from a new cloud customer. Adjusted EPS came in at $1.69 versus $1.65 expected, on revenue of $15.96bn, up 22% year-on-year. AI-related revenue reached $5.2bn, a 63% increase, with management guiding $6.2bn for Q4. Semiconductor sales climbed 57% to $9.17bn, while infrastructure software, boosted by VMware, grew 43% to $6.79bn. Net income surged to $4.14bn. Broadcom’s $1.4trn market cap reflects growing investor confidence in its challenge to Nvidia’s AI dominance.
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