RUSSIA: Magnit sees drop in Q1 profit | Progresiv
Magnit, Russia’s largest grocer, has reported a drop in first-quarter profits after being hurt by increased promotions. Net profit was down 13% to 8.2 billion roubles, while gross profit fell 10% to 65 billion roubles, although sales were up 16.7% to 255.3bn roubles. Like-for-like sales grew by 1.5%. 
Magnit said it was affected by the costs of greater promotional activity in the quarter, as it looked to gain market share and customer traffic. CEO Sergei Galitsky said the group had given up more than 3% in margins by lowering prices.
The group said it expects full-year sales to grow by just 17%-18% this year, compared to last year’s 24.5% growth, as consumer spending remains tight. It will also continue to invest on revamping its stores to attract more shoppers. (www.kamcity.com)
