Woolworths, which targets higher-end shoppers of food and some of its clothing, said headline earnings per share for the year to June 26 likely rose by 20 to 30 percent.

Headline EPS, the main measure of earnings in South Africa, excludes certain one-time items.

Total sales rose 9.4 percent, the company said, while same-store sales were up 6.3 percent.

Shares on the company, which are up 15 percent so far this year, jumped 3.3 percent to a lifetime high 32.23 rand, before finishing at 31.71 and outpacing a 0.85 percent gain in the JSE All-share index.

Consumer demand is recovering in South Africa after a contraction in 2009, helped by 6.5 percentage points of interest rate cuts that have pushed borrowing costs to historic lows.

Analysts and fund mangers, however, caution the recovery is not enough to justify the high valuations of retailers.

Woolworths trades at around 16 times its forward 12-month earnings, compared with around 14 times for the All-share index, the broadest measure of South African stock market.

Although latest data shows South Africa’s retail sales accelerating almost 10 percent in April, sales growth has been much weaker than expected this year.