Cost-cutting helped Metro Group narrow first-quarter losses, despite flat sales, the company revealed today (3 May).
Germany’s largest retailer said that its net loss narrowed to EUR3m (US$44m) in the period, down from a loss of EUR16m last year.
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Sales for the three months ended 31 March felt the negative impact of this year’s late Easter and remained flat at EUR15.5bn, the company said.
The group said that profits were boosted by its cost-cutting programme, Shape 2012, but did not provide details of its contribution. The company also felt the benefit of lower restructuring charges. Expenses related to Shape 2012 totalled EUR3m compared with EUR19m in the same period of last year, the company said.
“Metro’s profit improvement despite flat sales suggests the Shape 2012 programme continued to support earnings, however, management did not quantify the program’s impact. Assuming a similar contribution to previous quarters (c. EUR80-100m), the small step-up in reported profitability suggests that in contrast to the last two quarters Metro had to make significant investments in market conditions,” analysts at Sanford Bernstein wrote in an investor note.
Releasing the results, Metro said it expects sales to grow by more than 4% in 2011 and profit to rise by about 10%.
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