Metro AG (MEO) said its Media-Saturn household electronics unit posted an operating loss of 44 million euros ($64 million) in the second quarter as sales dropped.
Media-Saturn had a “strong” decline in comparable sales in Germany in the period, Dusseldorf-based Metro said today in an e-mailed statement. The loss compares to the profit before interest, taxes and extraordinary items of 41 million euros posted in the year-earlier period.
The unit, which runs Media Markt and Saturn stores, will change its strategy to “strongly focus on price and cost leadership,” said Media-Saturn chief executive officer Horst Norberg in the statement.
The company will offer online sales for Saturn in Germany in October and for Media Markt in January and aims to generate 5 billion euros in online sales by 2015. Media-Saturn will make more acquisitions to accelerate growth on the Internet, it added. The company bought online retailer Redcoon in March.
Metro Group confirmed its earnings forecast for 2011, saying it expects to profit before extraordinary items to rise about 10 per cent from the 2.42 billion euros reported last year. Operating profit will increase at Media-Saturn in the second half through cost-cutting measures.
Metro shares rose as much as 1.20 euros, or 3.1 per cent, to 39.80 euros and traded at 39.41 euros at 9:46 a.m. in Frankfurt. The stock has declined 27 per cent this year.
“Investors have expected bad figures; it is more important today that the full-year guidance was confirmed,” said Christoph Schlienkamp, an analyst at Bankhaus Lampe, said by telephone.
The Media-Saturn results are preliminary, Metro said.
Source – Bloomberg
