BERLIN — Metro narrowed its net loss in the second quarter of fiscal 2014/15, but goodwill impairment dented operating profits for the period. Sales rose slightly for the period at the German cash & carry, department store, hypermarket and electronics retail group.
For the period ending March 31, Metro reported a net loss of 67 million euros, or $75.6 million, compared to a loss of 92 million, or $126.3 million, for the period a year previously.
Dollar figures are converted at average exchange for the periods in question.
Goodwill impairment of about 450 million euros, or $507.7 million, relating to the group’s Real supermarket division (resulting from company acquisitions that were completed 17 years ago) as well as ongoing negative currency effects slashed earnings before interest and taxes (EBIT). The group reported an operating loss of 590 million euros, or $665.7 million, for period. Before special items, the operating loss of 40 million euros, or $45.1 million, was on par with the previous year.
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Group sales hit 14.37 billion euros, or $16.21 billion, a gain of 0.3 percent. Like-for-like sales were up 2.5 percent, which Metro said was the highest since the first quarter of 2008. This was driven by all regions and a slightly positive Easter impact.
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Sales slipped 2.5 percent at the core Metro Cash & Carry division to 6.69 billion euros, or $7.55 billion, while like-for-like sales booked a gain of 1.1 percent, driven by Eastern Europe and Asia. EBIT was down 12.6 percent to 37 million euros, or $41.7 million. The division operates 759 doors in 26 countries.
Galeria Kaufhof, which closed one store in the period and now has a network of 119 stores in Germany and 16 in Belgium, booked an operating loss of 24 million euros, or $27.1 million euros, compared to a loss of 2 million euros for the quarter, or $2.7 million, a year previously. Metro attributed the soft performance to mild fall weather and the resulting markdowns, as well as diminishing like-for-like sales. Sales for the department store division, which is reportedly in a bidding process with Hudson’s Bay Co., slipped 1.2 percent to 674 million euros, or $760.5 million. On a like-for-like basis, sales were down 0.6 percent.
For the first half of fiscal 2014/15, Metro grew net profit 8.5 percent to 378 million euros, or $449.5 million. EBIT before special items fell 4.7 percent to 984 million euros, or $1.17 billion, while sales in reported currency slipped 1.1 percent to 32.68 billion or $38.86 billion. In local currency, sales gained 1.1 percent.
Metro expects to exceed fiscal 2013/14’s EBIT level of 1.73 billion euros, or $2.34 billion. Moreover, Metro is forecasting a slight rise in overall annual sales, despite persistent challenges in the global economic environment.