Stockmann plc, reports Interim results for January-March 2014. The Group's net sales amounted to 395.6 million euros (431.3 million euros), a decrease of 7.6 per cent, excluding discontinued operations, or the franchise down 4.6 percent at comparable exchange rates. Operating profit was EUR -43.9 million (EUR -34.6 million euros). Net income was EUR -40.1 million (EUR -36.5 million). Earnings per share were EUR -0.56 (EUR -0.51).
Updated earnings forecast for 2014
The weak exchange rates and lower than expected Russian and Finnish markets consumer demand due to the Stockmann expects that the Group's euro-denominated revenue will fall in 2014 to 2013 year. Operating profit is not expected to exceed the 2013 level.
Stockmann had previously estimated that the Group's net sales in local currencies would increase slightly in 2014. Increase in net sales was estimated to occur in the second half of the year. Operating profit is expected to be somewhat better than in 2013. President and CEO Hannu Penttilä, "The Russian ruble against the euro was at a historically low level during the first quarter of 2014. Russia's economy has stalled, and consumer purchasing power declined. Also in Finland, the retail market has remained weak. These factors clearly had a negative impact on the Stockmann Group's operations in the first quarter of the year.
Department Store Division's revenue in rubles increased slightly, but a weak currency had a negative impact on Russian operations. Net sales and operating profit increased in the Baltic countries. In Finland, performance improved slightly towards the end of the reporting period.
Reporting period, carried out in April after the Crazy Days campaign, developed in a similar manner. The campaign had a turnover close to the previous year's level in local currencies, but the euro-denominated revenue fell by 6 per cent. Net sales increased in the Baltic countries and Russia in rubles, but sales were down by Russia and Finland to strong sales of e-commerce developments notwithstanding.
Muotiketjujemme different trend continued in the first quarter. Lindex's net sales increased in local currencies and the operating result improved slightly. Seppälä's earnings declined further, despite the store closures and other measures to reverse the outcome for the better.