German consumer electronics retailer Ceconomy, which split off from wholesaler Metro Group last year, has said that it plans to rein in costs and reconsider investments after its quarterly earnings were hit by another impairment on its stake in the wholesaler.
Ceconomy, which bolstered its balance sheet in June when telecoms firm Freenet took a stake, said it would cut €250 million from costs in the next five years and would be more cautious about opening new stores.
It reported a fiscal third quarter loss per share of €0.32 after it took an impairment of €138 million on Metro.
Russia Challenges
Metro's share price has been hit by its woes in Russia, but it recovered some ground earlier this month after the retailer raised hopes that its shrinking Russian business had turned a corner despite a quarterly drop in profit and sales.
Ceconomy's quarterly sales slipped 1% to €4.598 billion, but rose 1% after currency effects.
The firm that runs Media Markt and Saturn stores in countries across Europe stuck by its 2017/18 outlook for a slight increase in sales and a low to medium single digit%age rise in earnings before interest and taxation.
Quarterly sales were helped by the soccer World Cup, when Ceconomy's stores sell more televisions, and strong growth of online and services, offsetting the fact that Easter fell in its fiscal second quarter this year.
Online sales rose 21% to account for almost 13% of total sales, while revenue from services and solutions jumped more than a quarter to make up 8% of the total.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
