Metro reports strong Christmas sales at core units

BERLIN: Metro AG, Europe's fourth biggest retailer, saw a recovery at its wholesale and consumer electronics units gain pace in the last three months of 2014, making up for weakness at its department stores.

Metro said sales in the quarter, the first of its 2014/15 financial year, fell 2.2 percent to 18.3 billion euros ($21.65 billion).

Analysts had forecast a 2.8 percent fall to 18.2 billion euros.

Stripping out the impact of the disposal of Real hypermarkets in eastern Europe, like-for-like group sales rose 2.1 percent, accelerating from a 0.7 percent rise the previous quarter.

Chief Executive Olaf Koch said business over Christmas had created a "solid basis" for achieving his outlook for full-year sales, which Metro expects to rise "slightly" despite "the persistently challenging economic environment".

The German company, which runs 2,200 stores in 30 countries, is slimming down its portfolio and cutting costs and focusing on its wholesale and consumer electronics businesses.

Media-Saturn, Europe's biggest consumer electronics chain which had been losing sales to e-commerce players, reported a strong quarter, with same-store sales up 3.8 percent and online sales rising by more than 25 percent.

Metro said all regions contributed to that rise, with Spain and Eastern Europe particularly strong.

Its cash-and-carry business, which accounts for almost half of sales, saw like-for-like sales growth of 1.4 percent, with a double-digit rise in Russia although that was wiped out when converted into euros due to the slumping rouble.

Metro last year was forced to halt a planned stock market listing of a stake in its Russian cash-and-carry operation due to market turmoil over the Ukraine crisis. Metro's Real hypermarkets, which face competition from discounters such as Aldi and Lidl, saw like-for-like sales rise 0.9 percent, helped by the revamp of 50 stores.

The group's Kaufhof department stores saw like-for-like sales fall 1.4 percent, which Metro blamed on an unseasonably mild autumn, which hit sales of winter clothing.