October 20, 2014 / 8:08 AM / 3 years ago

Metro eyes better Christmas as consumer electronics turns corner

BERLIN (Reuters) - German retailer Metro AG MEOG.DE said on Monday it was “optimistic” ahead of the crucial Christmas period, after posting improved sales at its struggling consumer electronics unit for the first time in over two years.

Olaf Koch, chief executive of Metro AG, addresses the annual shareholder meeting in Dusseldorf February 12, 2014. REUTERS/Ina Fassbender

Group sales rose a like-for-like 0.7 percent to 15.1 billion euros ($19.3 billion) in the final quarter of its 2013/14 fiscal year, due to gains across its business - from cash-and-carry stores to Real hypermarkets and Kaufhof department stores. That was at the bottom end of forecasts, but the first rise across all units in almost four years.

Metro’s Media-Saturn is Europe’s biggest consumer electronics group, but it has been hamstrung by a power struggle with the chain’s founder as it battles fierce competition from online retailers. It saw like-for-like sales rise 1.8 percent.

Metro said that represented a “strong trend improvement” due to better store and online sales, with a like-for-like rise of 1.4 percent in its home market Germany due to a marketing drive.

Poor performance at Media-Saturn earlier this year forced Metro to cut its forecast in May.

“With Christmas approaching, Metro Group is well prepared and optimistically entered the current quarter,” it said in a statement. The group confirmed its forecast for 2013/14 earnings before interest and tax (EBIT) of 1.75 billion euros based on constant currencies.

Metro shares, which have fallen 31 percent this year due to the company’s exposure to the weak Russian rouble, were up 3.6 percent at 3:20 a.m. EDT, compared with a 0.1 percent rise in the European retail sector .SXRP.

Bernstein analyst Bruno Monteyne, who has an “outperform” rating on the stock, said this was the first time all four units had reported like-for-like sales growth in at least 15 quarters.

“Media Saturn returned to positive (same store growth) after eight periods of negative performance. After an underwhelming World Cup period, this is very positive news,” he wrote in a note on Monday.

Metro, Europe’s fourth-biggest retailer which operates a sprawling empire of 2,200 outlets in 31 countries, has been trimming its portfolio to focus on its cash and carry and consumer electronics stores in core markets.

It recently announced the sale of its cash-and-carry business in Vietnam and of its stake in British wholesale company Booker as well as the withdrawal from the Danish market.

Metro, which delayed a stock market listing of a stake in its Russian cash-and-carry operation earlier this year due to market turmoil over the Ukraine crisis, said on Monday that cash-and-carry sales in Russia remained very positive although they fell sharply in Ukraine.

Metro reports full results on Dec. 16.

Editing by Clara Ferreira Marques

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below