Stockmann Cuts 2013 Profit Forecast on Finnish Recession
Stockmann Oyj (STCBV) said full-year profit will miss forecasts as a recession in the northernmost country using the euro hurt the Finnish department-store owner’s first- quarter sales. The shares fell to a four-year low.
The operating loss in the first three months of 2013 widened to 34.5 million euros ($45.1 million) from 16.2 million euros a year earlier, the Helsinki-based company said in a statement today. The loss was wider than the 22.4 million-euro average of five analyst estimates compiled by Bloomberg.
Finland’s general retail market, which accounts for about half of the company’s revenue, has been “exceptionally weak,” Stockmann said, and operating profit this year will only match the figure for 2012 instead of rising. The volume of retail sales in the country fell 0.6 percent in February, compared with an increase of 5.9 percent a year earlier, according to Statistics Finland.
The company “expects the retail market in the Nordic countries to remain weak also during the rest of 2013,” Stockmann said. “Consumers’ purchasing power is not growing, and the general cost level is estimated to increase.”
Stockmann dropped as much as 7.7 percent to 10.75 euros, the lowest intraday price since April 22, 2009, and traded down 7.1 percent at 10:47 a.m. in Helsinki. The volume after 45 minutes of trading matched the three-month full-day average.
SEB AB and Nordea Bank AB cut recommendations on Stockmann’s shares over the past month, citing weaker sales. Kesko Oyj (KESBV), a Finnish food and home-goods retailer, said yesterday that first-quarter sales fell 7.2 percent to 2.2 billion euros, in part because the quarter had three fewer shopping days than a year earlier.
Stockmann said it plans to lay off all department-store and administrative workers for 12 working days to achieve 7 million euros in savings by mid-2014. It’s also reducing 10 million euros of fixed expenses in the department-store and fashion- chain units.
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