Jeronimo Martins SGPS SA (JMT), Portugal’s biggest retailer, fell the most in seven months after reporting earnings that missed analysts’ estimates and predicting a “tough year” for the domestic economy.
The hypermarket operator anticipates “a very tough year” for the Portuguese economy in 2012, Chief Executive Officer Pedro Soares dos Santos said today in a statement. First-quarter net income rose 21 percent to 68 million euros ($90 million), falling short of the 71.6 million-euro average of seven analyst estimates compiled by Bloomberg.
Earnings growth was helped by growth at the company’s Biedronka supermarket chain in Poland, while the Pingo Doce division in Portugal “has decided to reinforce its price positioning to strengthen its competitiveness,” Jeronimo Martins said. That investment may affect Pingo Doce’s earnings before interest, taxes, depreciation and amortization as a proportion of sales, the retailer said.
“Jeronimo Martins continues to deliver in Poland, but Portugal was weaker than expected,” Jose Rito and Bruno Bessa, analysts at Banco BPI SA (BPI) with an “accumulate” recommendation on the stock, said today in a research report. The company missed expectations for sales and Ebitda, they said.
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