Metro lifts profits in third quarter
German retail giant Metro said Thursday cost-cutting measures enabled it to lift profits "significantly" in the third quarter even if the difficult macroeconomic environment hurt sales.
Metro said in a statement its bottom-line net profit rose by 31.8 percent to 251 million euros ($342 million) in the period from July to September and underlying profits jumped 37.9 percent to 614 million euros, while sales slipped 2.0 percent to 15.977 billion euros.
"The difficult macroeconomic environment as well as the implementation of (restructuring measures) had a negative impact on the sales development," Metro said.
Looking ahead, Metro said it was forecasting underlying earnings growth of "around 10 percent."
However, "this target carries higher risks such as increased uncertainty caused by the European sovereign debt crisis and the economic slowdown," it cautioned.
"Meeting this target also assumes that the Christmas business will be significantly better than in the previous year" when Christmas sales were hit by the weather.
Nevertheless, even if Christmas sales developed only "normally", Metro was confident that its restructuring and cost-cutting measures would continue to have a positive effect, allowing full-year profits to grow "at least in line with current market expectations of 5 percent," it predicted.
© 2011 AFP