Jul 22, 2014
Kesko misses expectations on weak home goods sales
Jul 22, 2014
HELSINKI, Finland - Finnish retailer Kesko on Tuesday issued lower-than-expected second-quarter earnings due to weaker demand for homeware department stores in the recession-hit Nordic country.
Finland's second-biggest retailer after S Group said its home and speciality goods business fell to an quarterly operating loss of 18 million euros ($24 million) from a loss of 10 million in the same period last year.
The country's economy has contracted for two consecutive years as key industries struggled and as consumers cut back spending, and some economists see 2014 could be third negative year in a row.
Kesko's total adjusted operating profit in the quarter fell 3 percent from a year earlier to 68 million euros, missing analysts' average expectation of 73 million euros in Reuters poll.
Kesko earlier this year announced plans to close several department stores and that it could sell its home goods chain Anttila, which had sales of 390 million euros last year.
"Q2 results fell a bit short due to Anttila, but food and hardware trade went ahead of expectations. Weakness in the home goods segment is well known, so overall the result is qualitatively not as bad as it looks like," said Nordea analyst Rauli Juva.
Kesko gave a similar outlook for the next 12 months as in April, saying it expected flat sales and adjusted operating profit.
$1 = 0.7396 Euros
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