German retailer Metro hit by weak markets
Metro, one of the world's largest retailers, posted disappointing second-quarter results on Tuesday that underscored weak western European markets and problems at the group's electronics outlets.
Net profit fell nine percent to 40 million euros ($57 million), about half the level forecast by a Dow Jones Newswires analyst poll.
Metro's operating profit came to 306 million euros, well below a forecast for around 340 million euro, on sales flat at 15.7 billion euros.
Shares in the group were lower, dropping 0.56 percent to 37.60 euros while the DAX index of German blue-chips was 0.41 percent lower overall.
Last week, Metro cut its full-year forecast and chief executive Ekhard Cordes said Tuesday it would "step up the strategic realignment with regard to the online business" of its electronics outlets Saturn and Media Markt.
"Although the economy has continued to recover, the ongoing concerns about the European debt crisis are having a significant impact on consumer confidence," a statement said.
Metro nonetheless remained "confident that it will be able to achieve earnings growth before special items of around 10 percent" from the 2010 figure of 2.42 billion euros.
A global giant alongside Walmart, Carrefour and Tesco, Metro has suffered from government austerity programmes in Greece, Italy and Spain.
The situation was also less than rosy in its home market despite signs of a consumer rebound in June while the opening of Metro's first store in Egypt has been hampered by unrest there.
The Media-Saturn division posted a second-quarter loss in core earnings of 44 million euros, compared with a profit of 41 million in the same period of 2010.
For the group as a whole, second-quarter earnings before interest and taxes (EBIT) and special items were down eight percent at 306 million euros.
The group is pursuing international expansion plans, however, with the launch of five new stores in the first half of the year in China, Russia and Turkey.
It plans to open its first signature Metro Cash & Carry story in Indonesia next year.
© 2011 AFP