O'Key revenue growth slows to 7.2% in Q3 on sanctions impact, consumption decline
MOSCOW. Oct 28 (Interfax) - Russian retailer O'Key boosted revenue 7.2% year-on-year in the third quarter of 2014 to 35.86 billion rubles, the company said in a press release.
The growth rate for revenue slowed compared with previous quarters. The retailer boosted Q1 revenue 12.7% and Q2 - 12%.
Net profit advanced 70% in Q3 to 1.02 billion rubles.
"Revenue numbers for the third quarter were also compounded by a change in customer behavior, which has been driven by a combination of the economic downturn and the special economic measures introduced at the beginning of August," the press release says.
"In terms of sector trends, we see shopping patterns change in the current economic environment as consumers cut down on non-essentials and buy fewer items per visit," it says.
During the third quarter, the like-for-like average ticket grew by 2.8%. The number of tickets fell by 4.6%, leading to negative like-for-like retail revenue growth of 1.9%, with September being most affected.
"We felt the impact of the special economic measures, introduced by the government of the Russian Federation at the beginning of August, possibly more than our peers," CEO Tony Maher is quoted in the press release as saying. "Our range of fruit and vegetables, including exotic varieties, fresh fish, cheese and dairy products has been reduced. This was one of the factors that led to slower traffic and fewer items per ticket," Maher said.
In addition, like-for-like revenue growth has come under pressure since the beginning of 2014 due to increased external and internal competition, the latter especially noticeable in St Petersburg, Ufa and Krasnoyarsk, O'Key said
Gross profit rose 13.8% to 8.4 billion rubles in the third quarter. The gross margin increased to 23.5% from 22.1%. EBITDA was up 38.4% to 2.66 billion rubles and the EBITDA margin grew to 7.4% from 5.8%.