Reuters logo
7 months ago
UPDATE 2-Metro reports sluggish Christmas sales at Real and Media-Saturn
January 10, 2017 / 7:14 AM / 7 months ago

UPDATE 2-Metro reports sluggish Christmas sales at Real and Media-Saturn

* Christmas quarter sales slip below expectations

* Cash-and-carry growth in Spain, Turkey, China, Russia

* Media-Saturn December sales hurt by "Black Friday" (Adds shares, analyst comment)

By Emma Thomasson

BERLIN, Jan 10 (Reuters) - German retailer Metro, which plans to split into two companies by the middle of the year, reported that sales slipped 0.6 percent in the critical Christmas quarter due to weakness at its Real hypermarkets and a sluggish performance in consumer electronics.

Metro shares, which have jumped 13 percent over the last three months after it reported better than expected quarterly operating profit, were down 2.3 percent by 0845 GMT, the second biggest faller on the German mid-cap index.

Sales for the October-December quarter slipped to 17 billion euros ($18 billion), slightly below analysts' expectations for 17.2 billion, according to Thomson Reuters Smart Estimates. On a like-for-like basis, sales were up 0.1 percent.

"The Christmas quarter was uninspiring," said Equinet analyst Christian Bruns, who rates the stock "Neutral", adding he would have expected sales at the troubled Real business to start stablising by now given solid German consumption.

Data out last week showed that German retail sales rose by between 1.8 and 2.1 percent in 2016 in real terms, a slightly slower growth rate than in the previous year.

Metro plans to split off its cash-and-carry wholesale business along with Real, from Media-Saturn, Europe's biggest consumer electronics group, hoping to help each become more focused and better able to pursue growth.

The cash-and carry business that serves independent traders, hotels and restaurants saw sales rise 0.7 percent on a like-for-like basis, boosted by Spain, Turkey and China, Metro said on Tuesday.

It said it was also helped by a recovery in the Russian rouble and reported like-for-like sales growth in Russia despite more intense price competition. Russia is the unit's most profitable region.

Meanwhile, Real hypermarkets in Germany, battling tough competition from discounters and a shift towards smaller, more frequent shopping trips, saw same-store sales fall 1.7 percent due to a weak start to Christmas trade, particularly for food.

By contrast, Britain's Morrisons reported its strongest underlying sales performance for seven years - a rise of 2.9 percent in the nine weeks to Jan. 1 - helped by new ranges and revamped stores.

Metro confirmed its forecast for the 2016/17 fiscal year for a slight rise in overall sales and a slight improvement in earnings before interest and taxation before special items.

Metro said its Media-Saturn consumer electronics unit had flat like-for-like sales, with December turnover hurt by consumers pulling forward purchases due to the "Black Friday" sale in November.

It saw declines in sales of entertainment, photo and hardware products roughly offset by growth in smartphones, white goods and televisions.

British rival Dixons Carphone said last month it is planning for tougher times ahead although it has not yet seen any impact on consumer demand from Britain's vote to leave the European Union. (Reporting by Emma Thomasson; Editing by Georgina Prodhan/Keith Weir)

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