Wholesaler Metro AG said that its first quarter like-for-like sales were up 2.3% across the group, with Asia (+5.9%) and Eastern Europe (+6.4%) performing well for the group.
However, its Russia business continues to post like-for-like sales declines, with sales down 2.4% in the quarter, less of a slide than in recent quarters.
Positive Growth
“In the first quarter of 2018/19, Metro has achieved the best like-for-like sales development for six quarters,” said Olaf Koch, Metro chairman and chief executive.
“Nearly all segments contributed positively to this. In Russia the rolled out measures showed positive results and like-for-like sales were only slightly negative. We confirm our outlook for the financial year 2018/19.”
Total sales at the business were down 0.6% to €8.0 billion, with the group citing negative currency effects in Russia and Eastern Europe for the decline. Total sales in local currency rose by 2.1%.
In its home market of Germany, Metro posted a 0.2% decrease in like-for-like sales, against a high comparative of +2.3% the previous year. In Western Europe as a whole, sales were up 1.0%.
The group sales that its sales development in the first quarter was in line with its full year outlook for 2018/19.
Hypermarket Operations
It said that its hypermarket business, Real, which is now listed as ‘discontinued operations’ due to an impending sale, saw like-for-like quarterly sales down 0.5%. Reported sales were down 1.5% due to two temporary store closures.
Its online real.de business posted a gross merchandise value increase of 65% in the period, to €171 million.
Analyst Viewpoint
Commenting on the group’s performance, Bruno Monteyne of Bernstein Research said, “Russia LFL of -2.4% a big step up from Q4 (-6.6%), but behind our expectations (-1.5%).
“Whilst a sizeable step up QoQ that is likely to ease concerns on their key profit generator, it is now the 3rd quarter since the new Buy More Pay Less strategy and LFL growth is still negative. Management expects that by H2 we would see a turnaround in trading momentum.”
