Bad news for owner of Steers, Wimpy and Mugg & Bean in South Africa

Cape Town – Famous Brands, the restaurant group behind Steers, Wimpy, Mugg & Bean and Debonairs Pizza, expects its earnings per share to fall by as much as 33% for the six months ended August 2026, as higher fuel prices, interest rates and weaker performance in Botswana weigh on profitability.

According to BusinessTech, the group expects earnings per share (EPS) to range between 157 cents and 205 cents, compared with 236 cents in the corresponding period last year.

In its trading statement, the company said: “Elevated fuel prices arising from the conflict in the Middle East, together with higher interest rates, created a challenging economic environment and adversely affected Group profitability.”

Moneyweb reported that the expected decline also reflects a R40.9 million goodwill impairment linked to Botswana-based Retail Group, following Famous Brands’ decision to reduce its stake in the business from 51% to 30%.

Revenue performance

The impairment follows the underperformance of the Botswana operation amid difficult economic conditions. Famous Brands said the planned reduction in its shareholding forms part of its capital-light expansion strategy outside South Africa, allowing it to reduce direct exposure to operating losses while retaining an economic interest in the market.

According to Business Day, the group’s revenue performance has remained resilient, but its profitability has been affected by the challenging trading environment and the Botswana-related impairment.

The earnings outlook marks a contrast with the group’s annual results for the year ended February 2026, when revenue increased by 5.6% to R8.7 billion and headline earnings per share rose by 12.1% to 583 cents, according to EWN.

Famous Brands continues to see long-term potential in Botswana, saying its brands remain “well established and relevant to consumers”. The proposed stake reduction is expected to be completed in the 2027 financial year, subject to regulatory approvals and other conditions.

The latest outlook highlights the pressure facing major restaurant operators as higher operating costs and constrained consumer spending challenge profitability, even when revenue remains relatively resilient.