RUSSIA: Magnit cautions on FY sales forecast | Progresiv
Magnit has said it expects its full-year sales growth to now come in at the lower end of its forecast, as consumer spending remains cautious in a weakening Russian economy. Russia’s largest grocer now expects full-year sales to grow by 26% (with a margin of plus or minus 50bps); it had earlier forecast growth of 26%-28%. 
CEO Sergey Galitsky noted: “For now, consumers have a more aggressive approach to prices than two years ago and this will continue for quite a long time because wages are not growing and inflation has been rather high. We see that consumers are very selective about stores and are very focused on price”.
The forecast came after it reported that sales in the third quarter rose by just 21.7% to 235.6bn rubles, down from the 27.6% growth it reported in the second quarter. The group’s decision to lower prices also hurt profits, with EBITDA up just 10% to 26.5bn rubles, and EBITDA margin down 120bps year-on-year to 11.2%.
Galitsky said Magnit remains on track to open at least 1,350 discount outlets this year, and more than 1,000 c-stores in 2016, although he admitted that it may slow down expansion in 2017. (www.kamcity.com)
