Stockmann Group’s Interim Report, 1 January – 30 September 2011

Helsinki, Finland, 2011-10-26 07:00 CEST (GLOBE NEWSWIRE) —
STOCKMANN plc, Interim Report 26.10.2011 at 8:00 EET

July – September 2011:
Consolidated revenue grew by 9.6 per cent to EUR 461.3 million (EUR 420.7 million).
Operating profit was EUR 15.2 million (EUR 18.4 million).

January – September 2011:
Consolidated revenue grew by 10.8 per cent to EUR 1 379.2 million (EUR 1 245.0 million).
Operating profit was EUR 10.8 million (EUR 40.2 million).
Profit for the period was EUR -14.4 million (EUR 41.2 million).
Earnings per share came to EUR -0.20 (EUR 0.58).

Outlook for the full year updated on 30 September 2011: Revenue for 2011 is expected to continue growing. Operating profit for the full year is expected to decline on 2010.

CEO Hannu Penttilä:
The Stockmann Group’s revenue continued to grow well in the third quarter of 2011. The strongest sales growth was seen in Russia where the new department store in St Petersburg had a positive impact on Stockmann’s revenue. The Department Store Division’s operating result improved in all market areas in the quarter.

Lindex has increased its revenue in new markets. In Sweden, the overall fashion market sales have been down this year and, despite the increase in market share, Lindex’s sales in Sweden was lower than last year. Sales volumes which fell short of the target level and increased purchasing prices in a competitive environment affected negatively the earnings of our fashion chains.

The Group achieved a reasonable operating profit in the third quarter but the decisive period for full-year earnings performance is yet to come. We have positive expectations for the final quarter of the year thanks to the excellent outcome of our Crazy Days campaign. The uncertain market environment has, however, made forecasting very challenging. In the current circumstances we expect Stockmann’s full-year operating profit to decline on the previous year.

Outlook for the rest of 2011
Economic growth forecasts for the final months of 2011 have rapidly deteriorated because of the European debt crisis, and this has also weakened consumer confidence. Forecasting the consumer purchasing in the last quarter of the year has become more challenging than before.

The Russian markets are expected to continue to grow faster than those in the Nordic countries, although weakening of the rouble may negatively affect consumer purchasing power and behaviour. The positive growth of the consumer markets in the Baltic countries is expected to continue. However, higher inflation will affect consumers’ purchasing power in all markets.

The market for affordable fashion started off more slowly in 2011 compared with the strong first quarter of 2010. The production capacity problems in the Far East procurement markets have eased, which means that the autumn deliveries have taken place on time. Demand in the Swedish market, unlike the other markets, has remained weak and the performance of the overall fashion market has clearly declined. It is difficult to estimate demand in Sweden for the rest of the year but in other markets demand is expected to improve compared with the weak performance in the final months of 2010.

The capital expenditure projects of Stockmann’s Department Store Division, completed in autumn 2010 and early 2011, will positively affect revenue in 2011. Several of the department stores in Russia are still in their start-up phase, however. The positive effect of these investments on the division’s operating profit will only become visible from the last quarter of 2011 onwards.

The Stockmann Group estimates that its revenue and operating profit will develop positively in the final quarter of the year, which is a decisive period for the full-year earnings performance. Revenue for the full year is expected to continue growing. The Group’s 2011 operating profit is expected to decline on 2010.

The Group’s total capital expenditure in 2011 is estimated to be approximately EUR 65 million (EUR 165.4 million in 2010) and to remain below the estimated depreciation for the full year.

Key figures

This company announcement is a summary of the Stockmann Group’s Interim Report for January-September 2011 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 www.stockmanngroup.fi.

Press and analyst briefing and conference call
A press and analyst briefing in Finnish will be held today, on 26 August 2011 at 9.15 a.m. at the F8 Easy 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 August 2011 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.fi

STOCKMANN plc

Hannu Penttilä
CEO
 

Distribution:
NASDAQ OMX
Principal media