Stockmann Group's revised guidance for 2017 and outcome of impairment test
STOCKMANN plc, Inside Information 26.9.2017 at 8:30 EET
The Stockmann Group’s profit guidance for the year has been changed due to weaker than estimated performance in Lindex’s business. Stockmann now expects the Group’s adjusted operating profit in continuing operations to be approximately on a par with or slightly weaker than in 2016.
The 2017 operating result for Stockmann Retail is estimated to improve, as the turnaround of the business is progressing according to plan. Real Estate is expected to continue its stable profitable performance. Lindex’s operating profit in the first half of 2017 was clearly down on the previous year’s record-high earnings. The sales development has improved in September, but forecast for the fourth-quarter operating profit has been lowered.
Revised guidance for 2017: Stockmann expects the Group’s revenue for 2017 to decline due to weaker sales development of Lindex, changes in the store network and product mix. Adjusted operating profit in continuing operations is expected to be approximately on a par with or slightly weaker than in 2016.
Previous guidance for 2017 (published on 15 February 2017): Stockmann expects the Group’s revenue for 2017 to decline due to changes in the store network and product mix. Adjusted operating profit is expected to improve, compared with 2016.
Impairment of approximately EUR 150 million in Lindex’s goodwill
Stockmann has concluded an impairment test for Lindex's and Retail’s goodwill. As a result, Stockmann will recognise approximately EUR 150 million in impairment related to Lindex’s goodwill in its third-quarter consolidated income statement. The write-down will be reported as an adjustment, and it has no cash flow impact.
According to IFRS, the Stockmann Group tests the goodwill of its assets regularly to confirm that the recoverable amounts of the assets and related cash-generating units are greater than their carrying values. The impairment tests are done annually and whenever there is an indication that the asset may be impaired.
Lauri Veijalainen, CEO +358 9 121 5062 Kai Laitinen, CFO, tel. +358 9 121 5800