Metro, one of Europe’ largest retail groups, issued a stark profit warning that sent its shares sharply lower, saying underlying earnings could fall more than 15 per cent this year because of the eurozone crisis and its impact on spending.
The German retailer, owner of Metro “cash and carry” stores as well as the Media Markt and Saturn electronics chain and the Real hypermarket group, warned that consumer spending had slowed, particularly on electronics. Metro also said it would scale back its investment plans for next year.
Metro’s warning came after the UK’s Tesco earlier this month reported its first fall in profits in 20 years.
Metro said earnings before interest and tax, as well as before one-off costs, would now be about €2bn this year, having previously said they should be at about the level of the €2.37bn reported in 2011.
Olaf Koch, who took over as chief executive last year, said conditions had “significantly deteriorated”, with Metro’s performance in southern and eastern Europe being hit by high unemployment and measures to try to curb the region’s debt crisis. Almost 40 per cent of Metro’s sales are in Germany, where the economy has been relatively robust, but a further 55 per cent come from elsewhere in Europe.
Shares fell more than 8 per cent. The group, which also owns the Kaufhof department store chain, last month fell out of Germany’s blue chip Dax share index but remains Europe’s third largest retailer by sales behind Carrefour and Tesco.