Stockmann Group’s Interim Report 1 January - 31 March 2013

Operating result down in weak market environment

Helsinki, Finland, 2013-04-26 07:00 CEST (GLOBE NEWSWIRE) -- STOCKMANN plc, Interim Report 26.4.2013 at 8.00 EET

January-March 2013:
Consolidated revenue was EUR 431.3 million (EUR 450.3 million), down 3.2 per cent excluding terminated franchising operations.
Operating result was EUR -34.6 million (EUR -16.2 million).
Result for the period was EUR -36.5 million (EUR -20.9 million).
Earnings per share came to EUR -0.51 (EUR -0.29).
Outlook for 2013 (revised on 16 April): Stockmann Group’s revenue is expected to increase in 2013, excluding the terminated franchising operations. Operating profit is expected to not exceed the figure for 2012.

CEO Hannu Penttilä:
The exceptionally weak retail market and fewer sales days compared with 2012 affected the Stockmann Group’s revenue in the first quarter of 2013. Revenue was down in both divisions and in particular in operations in Finland. Lindex’s revenue outside the Nordic countries continued to grow. The Stockmann department store in St Petersburg was again outperforming all other units in its revenue growth.

Stockmann’s first-quarter operating result was significantly short of the target. We have now launched a cost savings programme that will reduce costs from summer 2013 onwards. Our aim is to improve profitability through a more efficient cost structure in all operations and units. 

The Crazy Days campaign in April, which is not part of the first-quarter reporting period, reached a new revenue record with a growth of 10 per cent. Despite the targeted savings and the successful Crazy Days campaign, Stockmann has revised its profit guidance for the full year 2013. We expect the retail market in the Nordic countries to remain weak during the rest of the year, and as a consequence we estimate that the Stockmann Group’s operating profit will not exceed the figure for 2012.

Outlook for 2013
The European economy is expected to remain unstable in 2013. No solution has been found for Europe’s debt crisis, and this will cause uncertainty in retail market performance. Declining purchasing power may further weaken consumers’ confidence and it seems probable that the market in Finland will experience a long period of low growth. The market for affordable fashion performed poorly both in 2011 and 2012, particularly in Sweden. The outlook in Sweden is expected to improve slightly towards the end of 2013.

Although GDP forecasts for Russia have been lowered,  the Russian market is likely to continue to perform better than the Nordic markets, provided that the price of oil does not significantly drop from its current level. The stable retail market development in the Baltic countries is expected to continue. However, high uncertainty and low consumer confidence may continue to affect consumers’ willingness to make purchases in all market areas.

Stockmann discontinued the Bestseller franchising in Russia and Zara franchising in Finland, which will somewhat slow down revenue growth. In Russia, however, the discontinuation will improve operating profit. Attention will be given to improving cost efficiency particularly in Finland, where a cost savings programme has been initiated. The Group’s capital expenditure is estimated to be lower than depreciation, and to amount to approximately EUR 60 million in 2013.

Stockmann expects the Group’s revenue to increase in 2013, excluding the terminated franchising operations. Operating profit is expected to not exceed the figure for 2012.

Key figures


  1-3/2013 1-3/2012 1-12/2012
Revenue, EUR mill. 431.3 450.3 2 116.4
Revenue growth, % -4.2 10.4 5.5
Relative gross margin, % 45.8 48.0 49.5
Operating profit, EUR mill. -34.6 -16.2 87.3
Net financial costs, EUR mill. 6.0 8.7 32.4
Profit before tax, EUR mill. -40.7 -24.9 54.9
Profit for the period, EUR mill. -36.5 -20.9 53.6
Earnings per share, undiluted, EUR -0.51 -0.29 0.74
Equity per share, EUR 11.31 11.30 12.40
Cash flow from operating activities, EUR mill. -111.3 -73.3 123.7
Capital expenditure, EUR mill. 11.5 10.3 60.3
Net gearing, % 116.2 112.5 90.9
Equity ratio, % 37.7 38.5 42.8
Number of shares, undiluted, weighted average, 1 000 pc 72 049 71 841 71 945
Return on capital employed,
rolling 12 months, %
4.0 4.8 5.1
Personnel, average 14 829 15 057 15 603


This company announcement is a summary of the Stockmann's Interim Report for 1 January - 31 March 2013 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

Press and analyst briefing and conference call
A press and analyst briefing in Finnish will be held today, on 26 April 2013 at 9.15 a.m. at the F8 Tema 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 26 April 2013 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


Hannu Penttilä


Principal media

OVK Q1 2013 ENG.pdf