Metro Group has warned there are increased risks over whether it is able to hit its annual EBIT target.
The German retail giant, in its third quarter profits announced today (3 November), said that uncertainty from the European debt crisis and weakening economic growth could affect its 10% forecast.
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However, even in the faltering economic climate, Metro is still forecasting at least 5% EBIT growth.
For its third-quarter, Metro posted EBIT before special items of EUR6.1m (US$8.4m), jumping 37.9% on the same period last year. Earnings climbed across the business, apart from department store chain Galeria Kaufhof. Sales were down 2% across the business, slumping to EUR16bn for the three month period.
This was due to consumers in Western Europe reluctance to spend, negative currency effects in Eastern Europe and store closures, as well as the phasing out of unprofitable product categories at Metro Cash & Carry and Galeria Kaufhof, the company said.
Net profit for the third-quarter before special items was EUR251m, up 31.8% from the third quarter last year.
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By GlobalDataFor the nine months to September, EBIT before special items was EUR1.07bn, compared to EUR915m the year before. EBIT adjusted for special items was EUR972m, up from EUR794m last year.
From January to September, the retailer posted sales of EUR47.2bn, down 0.6%. Sales were down 1.3% in Germany and down 2.6% in Western Europe. However, sales were up 1% in Eastern Europe and up 11.4% in Asia and Africa.
However, Metro said it increased its earnings despite the “challenging” trading environment.
Metro CEO Dr Eckhard Cordes said: “We again significantly increased our earnings despite a challenging macroeconomic environment. This attests to the economic strength of Metro Group.”
Net profit for the nine months before special items reached EUR334m, up from EUR318m in same period in 2010. Adjusted net profit before special items was EUR266m, up from EUR229m the year before.
