Mr Price Group Limited

Analyst thesis

Our recommendation is based on:

• Trading at historically low valuations on a P:E basis.

• Positioned to benefit from any positive changes in consumer affordability over the medium- to long-term through the easing of inflation and the central bank pivoting back to a rate-cutting cycle.

• An expectation of continued long-term growth and market share protection, driven by organic growth (store growth and subdivisions such as Mr Price Kids and Mr Price Cellular) and the performance of acquired businesses (Studio 88, Power Fashion, NKD, etc.), supported by relatively low debt levels compared to its peers.

• Expansion into Europe through the acquisition of NKD provides potential growth opportunities but also execution risks that will need to be managed to achieve the required return on investment. Although debt was used to purchase the business, management plans to reduce the level and cost of debt in Europe, with the full benefit evident by FY28.

• MRP demonstrates relatively strong business fundamentals and, when combined with low valuations and the defensive low-value proposition during consumer affordability concerns, is placed in a favourable position to be seen as one of the preferred retailers by consumers.