Stockmann: Affordable fashion market to improve in autumn

16 Aug '12

4 min read

Stockmann Group announces Interim Report from April-June 2012.

Highlights:

- Consolidated revenue was up 5.3 per cent to EUR 537.2 million (EUR 510.2 million).

- Operating profit was up 16.0 per cent to EUR 29.7 million (EUR 25.6 million).

- Consolidated revenue was up 7.6 per cent to EUR 987.5 million (EUR 917.9 million).

- Operating profit was EUR 13.4 million (EUR -4.4 million).

- Result for the period was EUR -2.3 million (EUR -20.1 million).

- Earnings per share came to EUR -0.03 (EUR -0.28).

- Full-year outlook unchanged: Revenue and operating profit expected to be above the previous year's figures, provided that the market sentiment does not significantly worsen.

CEO Hannu Penttilä:

The Stockmann Group’s revenue continued to grow in the second quarter of 2012. In the Department Store Division the growth was boosted by the successful Crazy Days campaign and the continued good performance in the newest department stores in Russia. Lindex improved its revenue and gained market share in all markets.

We improved operating profit by EUR 4.1 million in the quarter and thus continued the strong performance started earlier this year. Operating profit improved significantly in Russia, despite the loss-making Bestseller operations which will be closed during 2012. Lindex benefitted from successful summer collections and made a clear improvement in its earnings in the quarter.

Seppälä’s performance has been weaker than expected. We established a common Fashion Chain Division which aims at accelerating growth and benefiting from synergies in both the Lindex and Seppälä fashion chains.

Market outlook for the second half of the year remains uncertain due to the unresolved European debt crisis. We are, however, well positioned to achieve the targeted revenue and operating profit growth for the full year, provided that the market sentiment does not significantly worsen.

The Stockmann Group’s long-term financial targets are: a minimum of 20 per cent return on capital employed, a minimum of 12 per cent operating profit margin, sales growth above the industry average, and an equity ratio of a minimum of 40 per cent. The Board of Directors decided in June 2010 to set the timetable for achieving the long-term targets at 2015.

Due to the continuing economic uncertainty and the unresolved European debt crisis, the Board has now stated that the long-term financial targets will remain as they are, but achieving the targets in the set timetable will not be realistic in the current market environment.

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