Russia's Magnit Sees Revenue Up 9.6% In Second Quarter
Russian retailer Magnit has said that shopper behaviour is starting to normalise, with the group reporting an acceleration in like-for-like sales in its second quarter.
For the quarter, Magnit reported a 9.6% increase in total revenue, to RUB 424.3 billion (€4.88 billion), with net retail sales increasing 9.1% year-on-year.
Like-for-like growth was up 5.2%, driven by 10.0% traffic growth and a 4.4% reduction in average basket size.
However, the group said that among its existing customer base, it is seeing more frequent shopping visits, as well as signs of 'trading up' in some areas.
Sales Growth Accelerates
”Despite the strong comparable performance last year, we delivered a very good set of results for the second quarter," commented Jan Dunning, chief executive. "Sales growth accelerated across all formats, underpinned by further growth in LFL sales and rapid expansion. I am pleased to see mature stores as a key driver of these improvements.
"Consumer behaviour and shopping patterns are now normalising. Since June we have seen healthy LFL performances, with positive ticket and traffic development."
Gross profit increased by 5.5% year-on-year to stand at RUB 99.5 billion for the quarter, with a margin of 23.4%.
During the period, the company opened a net new 444 stores, opening 519 new outlets (including 308 convenience stores, one supermarkets and 210 drugstores) and closing 75 stores.
It also continued its store refurbishment plan, redesigning 143 stores, including 131 convenience stores and 12 supermarkets. As of 30 June, some 74% of its convenience store estate, as well as 34% of supermarkets and 59% of drugstores, are either new or refurbished. The group has also sought to bolster its online capabilities.
Magnit Completes Dixy Acqusition
Since the end of the quarter, the group has completed its acquisition of the Dixy retail chain, comprising 2,477 stores largely in Moscow and Saint Petersburg.
"Continuous improvement of sales densities, sustainable margins, better cash generation and flexible financial position allowed us to speed up organic expansion and take advantage of a unique and value-accretive M&A opportunity through the acquisition of Dixy," Dunning added.
"This is a strategically important transaction for Magnit that dramatically changes our market positioning. Integration of such large business and extraction of synergies will, of course, take time and effort, however, our ambitious long-term targets remain unchanged and may be achieved even a bit earlier."
It also recently announced a delivery partnership with online player Wildberries.