Finland's Kesko Posts Strong Second Quarter, Increases Profit Outlook
Finnish retailer Kesko has reported an operating profit of €154.1 million in the second quarter of its financial year, following what it described as a 'fast response to exceptional circumstances and a well-functioning strategy'.
The group said that net sales for continuing operations were up 2.2% in comparable terms in the quarter, to €2.81 billion.
In its trading update, Kesko noted that sales were 'strong' in the grocery trade, as well as in its building and technical arm, but declined in the car trade.
In grocery, the group saw food retail sales rise 12.3% between April and June, with sales growing in all K-food stores and online.
E-commerce was up 500% in the month of June, it said, and accounted for more than 4% of total grocery sales in the second quarter.
On foodservice, the business said that it responded to declines in the market with 'successful adjustment measures', with its foodservice arm seeing signs of a turnaround in fortunes in June.
"Kesko achieved a record result in the second quarter," commented Kesko president and CEO Mikko Helander. "Our fast response, well-functioning strategy and good market for the building and technical trade enabled a good result under exceptional circumstances."
Looking ahead to the remainder of the year, Kesko said that it is anticipating comparable operating profit for continuing operations to be in the range of €430 million to €510 million, ahead of the €400 million to €450 million it forecast previously.
The group said that the improved forecast is based on 'better than anticipated' sales development in its building and technical trade division, as well as a strong grocery performance.
'Consumer sales have developed better than anticipated during the exceptional circumstances,' it said. 'B2B sales have also continued stronger than anticipated in both building and home improvement stores and Onninen. Retail sales for all the grocery trade chains have developed better than anticipated, compensating for the decrease in sales in the foodservice business.'
The group did note, however, that the lasting effect of the COVID-19 pandemic on its business is as yet unclear, and as such the guidance on comparable operating profit for 2020 is still wide.
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