German retail giant Metro Group has issued a profit warning for the full year amid a “worsening” European consumer environment and its impact on spending.
The world’s fourth-largest retailer said it expects EBIT before special items to fall by around 15% this year to around EUR2bn (US$2.59bn). The group had previously forecast underlying EBIT to “roughly match” the previous year’s result of EUR2.37bn.
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CEO Olaf Koch said the European consumer environment had “worsened further” in recent weeks against the backdrop of rising unemployment, which has “hit a new record high” in the Eurozone, and “intensified consolidation measures to contain the sovereign debt crisis”.
Koch said the crisis had started to materially affect Metro’s business development, especially in southern Europe and parts of eastern Europe, despite its measures to increase sales and efficiency.
However, the group said its target of sustainable sales growth for 2012 remains “unchanged”, as do its goals for improving cash flow and reducing net debt.
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