FINLAND: Kesko Q1 profits hit by "economic weakness"
Kesko's Q1 results have missed expectations
Profits from Kesko's food retail business fell in the first quarter of the year, with the Finland-based grocer's domestic business faring worse than the market as a whole.
Operating profit from Kesko's food arm fell 3.5% in the three months to the end of March to EUR46.5m (US$64.4m). Net sales were down 3.7% at EUR1.01bn.
Kesko said this year's later Easter affected sales but admitted grocery sales from its K-food stores were behind the market.
"The grocery sales of K-food stores in Finland decreased by 3.5%, which is estimated to have been below the total market development. The rise of consumer prices in the grocery trade has slowed," Kesko said.
In Russia, where Kesko is building a fledgling business, the "sales and profitability" of its food stores improved, the retailer said.
Overall, Kesko, which also has department stores and home improvement outlets, among other businesses, said its group profits were hit by currency exchange rates and economic weakness in Finland.
The retailer posted an operating loss of EUR13m before considering non-recurring items such as the restructuring provisions for measures to improve Anttila's profitability.
Without this cost, it generated an operating profit of EUR19.1m versus EUR18.6m in the first quarter of 2013.
Kesko booked a net loss of EUR12m from EUR11m for the same period a year earlier.
Group sales dipped 1.4% to EUR2.1bn.
The retailer has said it expects net sales and operating profit excluding non-recurring items for the next 12 months "to remain at the level of the preceding 12 months, unless the overall consumer demand weakens significantly".
Click here for the full results.
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