Helsinki, Finland, 2014-08-13 07:00 CEST (GLOBE NEWSWIRE) -- STOCKMANN plc, Interim Report 13.8.2014 at 8.00 EET

April-June 2014:
Consolidated revenue was EUR 495.3 million (EUR 543.6 million), down 8.9 per cent, or down 5.1 per cent at comparable exchange rates.
Operating profit was EUR 3.5 million (EUR 30.1 million).

January-June 2014:
Consolidated revenue was EUR 890.9 million (EUR 974.9 million), down 8.3 per cent excluding terminated franchising operations, or down 4.9 per cent at comparable exchange rates.
Operating result was EUR -40.3 million (EUR -4.6 million).
Result for the period was EUR -48.2 million (EUR -17.1 million).
Earnings per share came to EUR -0.67 (EUR -0.24).

Guidance for 2014 (revised 12 June 2014):
Stockmann estimates that the Group’s euro-denominated revenue in 2014 will decline on 2013. The Group’s operating profit in 2014 is expected to be significantly weaker than in 2013.

CEO Hannu Penttilä:
”The retail market is undergoing significant changes in Finland. Consumer confidence remains low and demand for non-food products has clearly declined. We at Stockmann have not succeeded in beating this negative market development. Online business is changing consumer behaviour, but online stores are not yet compensating for the dramatic decline in traditional retail. At the same time, the market environment in Russia continues to be challenging, as the Russian rouble remains weak and the country’s future economic direction is unclear. The market environment in the Baltic countries, Sweden and Norway has been stable.

Stockmann’s revenue in the second quarter of 2014 was down. Lindex continued to perform well and its revenue grew in local currencies. However, Lindex’s euro-denominated revenue declined, due to currency effects. For the Department Store Division and Seppälä, revenue in the second quarter was a major disappointment.

As a result of the decrease in sales and lower gross margin, the Stockmann Group’s earnings fell significantly below the figure for 2013, particularly in Finland and in Russia. A number of measures have been taken to strengthen sales, improve customer service and bring the cost structure in line with the weak market conditions. These measures include the new sales organisation structure in the department stores in Finland. Savings from these changes will mainly be visible from 2015 onwards, though the Group’s costs in the first half of the year were lower than in 2013. The outlook for the rest of 2014 is challenging, since there are no signs of any significant improvement in the market environment.”

New Group strategy
Stockmann has started a process to review and revise its strategy. The process covers all of the Group’s operations in all markets, and the target is to improve Stockmann’s long-term competitiveness and profitability.

As a part of the strategy process, Stockmann will introduce a new reporting structure in order to better reflect the different business logics in retail and real estate. This will be done to increase focus and transparency and to optimise the use of floor space in order to improve the customer experience. From 1 January 2015 the new reporting segments will be: Stockmann Retail, Real Estate and Fashion Chains.  

Stockmann Retail will consist of the Stockmann department stores, the Academic Bookstore, Hobby Hall, their respective online stores (Stockmann.com, Akateeminen.com and Hobbyhall.fi) and the Stockmann Beauty cosmetic stores. Real Estate will consist of the Group’s real estate holdings in Helsinki, St Petersburg, Tallinn and Riga which are used by the Stockmann department stores and external tenants. Fashion Chains will consist of Lindex and Seppälä.

Stockmann’s interim report for January-September 2014 and the financial statements for 2014 will be based on the current reporting structure. The 2014 figures will be restated in line with the new reporting structure for comparison purposes, and these restated figures will be published during the first quarter of 2015.

Outlook for 2014
The Russian rouble has weakened considerably and economic growth in Russia is expected to remain at a low level in 2014. The crisis in Ukraine, sanctions against Russia and their counter-measures will continue to affect the Russian economy during the year. As a consequence, visibility is very weak in the Russian retail market.

In Finland, uncertainty will continue in the retail market. Demand for non-food products is expected to remain weak in the second half of the year. Purchasing power is expected to remain low, which will have a negative effect on consumer purchasing behaviour.

The affordable fashion market in Sweden is expected to improve slightly in 2014. The retail market in the Baltic countries is expected to remain relatively stable. Low consumer confidence may, however, affect consumers’ willingness to make purchases in all market areas.

As a consequence of the uncertain outlook, Stockmann launched a cost savings programme in spring 2013. The programme is continuing in 2014, focusing on long-term structural changes in order to adjust the cost structure to the weak market and to improve performance. In Stockmann’s on-going strategy process the target is to improve the Group’s long-term competitiveness and profitability.

The Group’s capital expenditure for the year is estimated to be lower than depreciation, and to amount to approximately EUR 60 million.

Stockmann estimates that the Group’s euro-denominated revenue in 2014 will decline on 2013. The Group’s operating profit in 2014 is expected to be significantly weaker than in 2013.

Key figures
 

This company announcement is a summary of the Stockmann's Interim Report for 1 January - 30 June 2014 and includes the most relevant information of the report. The complete report is attached to this release as a pdf file and is also available on the company's website at stockmanngroup.com.

Press and analyst briefing and conference call
A press and analyst briefing in Finnish will be held today, on 13 August 2014 at 9.15 a.m. at the Fazer À la Carte restaurant on the 8th floor of Stockmann's Helsinki city centre department store, Aleksanterinkatu 52.

A conference call in English will be held today, on 13 August 2014 at 11.15 a.m. EET. To participate the conference call, please dial +358 9 8864 8511 and, when requested, key in the meeting room number *657899* including the asterisks. The presentation material will be available for downloading on the company's website from 9.15 a.m. EET onwards.

Further information:
Hannu Penttilä, CEO, tel. +358 9 121 5801
Pekka Vähähyyppä, CFO, tel. +358 9 121 3351

www.stockmanngroup.com


STOCKMANN plc

Hannu Penttilä
CEO


Distribution:
NASDAQ OMX
Principal media