Shares in the Metro Group fell yesterday and continued to slide today, after the world’s third-largest retailer reported weaker-than-expected results for its third quarter.
Underlying operating profit was down 26.3% to €154m (reported operating loss of €36m), while sales declined by 2.7% to €13.6bn, with both results missing analysts’ estimates. The results were also affected by one-off charges of €190m related to restructuring at its Cash & Carry business.
Sales in Germany were up 0.7% to €5.17bn, but International sales declined by 4.7% to €8.42bn. Overall like-for-like sales were flat.
Metro said it was affected by currency fluctuations and recent terror attacks, which affected supplies to the hospitality industry in Europe. CEO Olaf Koch noted: “Terror has had an impact on the way people dine out”.
Koch also said the group’s restructuring strategy has affected sales in the short term, but stressed that they should begin showing results within three years. He also noted that its Russian unit is improving, reporting increased like-for-like sales in June – the first such in a long time.
He added that the group’s plans to separate its wholesale and food business from Media-Saturn was on track to be completed by mid-2017.
- Combination of terror attacks and reduced spending power probably causing consumers to ‘make do’ and eat out less – see here
- Separation of Food and Wholesale from Media Saturn should increase appreciation of non-food success, putting more pressure on the traditional business