Metro slashes earnings forecasts as crisis bites
German retail giant Metro on Tuesday cut its earnings targets for the current year, pointing to a weak start to Christmas business as the eurozone debt crisis increasingly hurts consumer confidence.
Just a month after it had predicted a 10-percent rise in underlying earnings for 2011, Metro said in a statement that both full-year revenues and earnings were now expected to come in "slightly below" the previous year's levels.
"Against the backdrop of a weak start to Christmas business in many European countries, negative currency effects and the increasingly noticeable effects of the sovereign debt crisis on the economic development and consumer confidence, we are adjusting our sales and earnings guidance for 2011," the group said in a statement.
"Should the presently weak trend of the important Christmas business continue, we anticipate sales to come in slightly below the prior year level of 67.3 billion euros" ($90 billion), it said.
Underlying profits, as measured by earnings before interest and tax (EBIT), would also be "slightly below the prior-year level of 2.4 billion euros."
The profit warning triggered a sharp sell-off in Metro shares on the Frankfurt stock exchange, where they were showing a loss of 10.13 percent at 33.24 euros.
© 2011 AFP