Stockmann Jan-Sept sales down 1.4%

January - September 2013:

Full-year outlook revised: Stockmann Group’s revenue in 2013 is expected to be slightly down on 2012, excluding the terminated franchising operations. Even though most of Stockmann’s operating profit is generated during the fourth quarter of the year, operating profit for 2013 is not expected to reach the previous year’s level.

Stockmann previously estimated that its revenue would increase in 2013, excluding the terminated franchising operations. Operating profit was not expected to exceed the figure for 2012.

CEO Hannu Penttilä said, “The retail market environment in the third quarter of the year was very weak, particularly in Finland. Consumer confidence remained low and the warm weather affected sales of autumn merchandise. The weakened Russian, Swedish and Norwegian currencies also had a negative effect on Stockmann’s euro-denominated revenue. As a result, the revenue fell short of our target for the quarter.

Among the Stockmann Group’s businesses, Lindex performed best in the difficult market conditions. It gained market share in all main markets and its operating profit was up for the quarter. The Department Store Division’s operating profit was down on 2012. The weakened rouble, in particular, had a negative effect on the gross margin and operating profit. Seppälä, which is currently undergoing changes, also posted a lower operating profit than in 2012.

Our net profit was improved by the tax refund resulting from the Swedish and German tax authorities’ decision to eliminate Lindex’s double taxation in 1999-2005. Consequently, Stockmann’s earnings per share were up significantly.

The department stores’ Crazy Days campaign, which took place after the third quarter, reached a new sales record and revenue grew in all market areas. However, it is uncertain how consumers will behave during the rest of the final quarter, which is the most important for Stockmann’s full-year operating profit. The cost savings measures that were decided on in the spring will continue. Also it is of utmost importance that we implement structural changes to adapt our cost structure to the lower sales volumes.”

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Stockmann Group