X5 Retail Group, Russia's second-largest retailer, has started closing the gap on market leader Magnit after about six years of losing ground.
Sales at X5 rose 28 per cent in the second quarter, the Moscow-based company said in a recent statement, outpacing the 27-per-cent growth recently reported by Magnit.
X5, controlled by an investor group including billionaire Mikhail Fridman, has struggled to keep pace with its larger competitor since 2009, as Magnit has more than tripled its store count.
To catch up, X5 installed a new management team led by chief executive officer Stephan DuCharme and has started refurbishing stores and improving the product assortment.
“The results look exceptionally good,” Marat Ibragimov, analyst at BCS Financial Group, said in a note. “We see the numbers as supportive to our bullish view.”
X5 rose 3 per cent to $18.90 at 10am in London, where the stock trades. The shares trade at about 11 times historic earnings versus 22.7 times for Magnit.
News by Bloomberg, edited by ESM
