BERLIN — Based on a strong third quarter, the Metro Group has raised its earnings outlook for 2010.
“We are experiencing a significant pickup of business in all regions. Against the backdrop of the good economic development and our progress made with Shape 2012 (restructuring program), we expect to generate earnings of 2.3 billion euros,” Metro Group chief executive officer Eckhard Cordes said.
The German cash & carry, department store, hypermarket and electronics retail group had previously forecast earnings before interest and taxes (EBIT) before special items would reach 2.2 billion euros, or $3.07 billion at current exchange rates.
Metro said net profit surged 83 percent surge in the third quarter to 170 million euros, or $218.2 million. Group sales were up 4.5 percent to 16.3 billion euros, or $20.9 billion, with like-for-like sales growth in every division. EBIT rose 3.4 percent to 425 million euros, or $545.5 million. All dollar figures are converted at average exchange rates for the period in question.
The 138-door Galeria Kaufhof department store division increased sales 3.5 percent in the quarter to 828 million euros, or $1.06 billion, and more than tripled EBIT to 7 million euros, or $9 million. For the first nine months of the year, however, the department store chain continued to operate in the red, though it showed marked improvement over 2009. The EBIT column showed a loss of 27 million euros, or $35.6 million, during the period compared with a loss of 70 million euros, or $95.7 million, during the same period in 2009.
Metro’s core 674-door Cash & Carry unit had a strong third quarter, with EBIT up 45.6 percent to 247 million euros, or $317 million, and sales increasing 4 percent to 7.83 billion euros, or $10.05 billion.
Full-year sales for the group are expected to exceed 2009 levels, but still fall short of the group’s medium-term target of 6 percent growth per year. Metro said this reflected the macroeconomic situation as well as fewer store openings in 2009 and 2010.