Metro Reports Pickup in Christmas Sales as Turnaround AdvancesAaron Ricadela
Metro AG, operator of Germany’s Kaufhof department stores, reported higher Christmas sales with all divisions reporting a better December, signaling its turnaround is progressing despite weak demand in its home market.
Same-store sales rose 2.1 percent in the three months through December, Dusseldorf-based Metro said today in a statement. Comparable-store revenue at the Media Markt consumer-electronics chain reached a five-year high, according to Bloomberg Intelligence. The shares rose as much as 4.6 percent.
“Not too many retailers will be able to report that over Christmas,” Sanford C. Bernstein analyst Bruno Monteyne said in a note to clients today, referring to same-store sales. “Metro has strong assets and the consensus view is clouded by its German operations” and a high tax rate.
Chief Executive Officer Olaf Koch is relying on growth in Spain and eastern Europe while sales in Germany falter. Comparable sales fell at Galeria Kaufhof as a mild winter held Christmas clothes shopping in check, and German sales at Cash & Carry wholesalers declined.
The stock traded 3.6 percent higher at 9:25 a.m. in Frankfurt. The retailer’s shares lost 28 percent last year, compared with a 2.7 percent gain in Germany’s 30-stock DAX Index.
Metro has a “solid basis” for sales goals this year after an “overall positive” Christmas business, Koch said in the statement. The company reported lower profit for the fourth quarter last month and said December sales “began to pick up” after a slow start.
Koch, CEO since 2012, is trying to spur growth and generate cash through asset sales at Germany’s largest publicly traded retailer. Metro is divesting operations in Vietnam, Denmark and other countries, and has suspended an initial public offering of its Russian wholesale business.
The CEO said last month the IPO didn’t make sense given the political crisis and worsening economic environment in Ukraine. Those problems as well as divestments also created a drag on first-quarter total revenue, which declined 2.2 percent. Metro is scheduled to report full results next month.