Jan 12, 2010
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Metro fourth quarter sales fall, economic concerns linger

Jan 12, 2010

FRANKFURT, Jan 12 (Reuters) - German retailer Metro (MEOG.DE) posted a bigger-than-expected sales drop for the crucial fourth quarter on Tuesday 12 January and pointed to lingering concern about the economic situation.

Photo: dpa

"In 2010 we expect the macroeconomic conditions to remain challenging. Nevertheless, we see many opportunities for our strong formats," Chief Executive Eckhard Cordes said.

Metro, which surpassed British rival Tesco (TESO.O) and is now the world's third-largest retailer, said it was planning to raise investments and store openings this year, taking heart from what it called gratifying holiday season sales in Germany.

Cordes's remarks follow similarly cautious comments from other European retailers last week amid concern high unemployment and low wage growth may dent consumer confidence further.

Metro said in a trading statement that fourth-quarter sales fell 3.4 percent to 19.4 billion euros. This was slightly better than the 3.7 percent decline over the first nine months of 2009.

Analysts in a Reuters poll had on average estimated sales would fall 2.3 percent to 19.6 billion euros.

Metro expects full-year operating earnings before special items to be in line with market expectations, it said, and added that its fourth-quarter operating earnings development had been supported by its Shape 2012 restructuring programme.

Metro makes about a third of its annual sales and two-thirds of its operating profit in the fourth quarter.

Metro trades at around 13.8 times 12-month forward earnings, according to Thomson Reuters StarMine, which weights analyst estimates according to their track record, while Tesco (TSCO.L) trades at 12.8 and Carrefour (CARR.PA) at 15.

Metro is due to report full-year results on March 23.

(Reporting by Eva Kuehnen; Editing by Michael Shields)

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