Swedish retailer Axfood has booked drop in third-quarter profits as earnings were hit by costs related to store closures.
In the three months to the end of September, profit after tax fell 0.7% to SEK265m (US$39.7m), which Axfood attributed to non-recurring costs associated with store closures in the period.Operating profit also dropped, to SEK368m from SEK370m a year earlier.
However, sales climbed 3.5% to SEK9.04bn, with like-for-like sales unchanged in the period.
Retail sales for group-owned stores increased by 3%. Axfood said a number of different marketing activities contributed to group sales growth and to strengthening the Hemköp brand.
"Focus is now on attractively priced customer offers aimed at boosting sales," the company said, adding that it sees "no major changes" in the market outlook for the remainder of the year.
Show the press release
INTERIM REPORT AXFOOD AB 1 JAN.-30 SEPT. 2012
THIRD QUARTER SUMMARY
- Axfood's consolidated sales for the period July-September totalled SEK 9,044 m (8,735), an increase of 3.5%.
- Retail sales for Group-owned stores increased by 3.0% during the period.
- Like-for-like sales were unchanged during the period.
- Operating profit for the period was SEK 368 m (370).
- Profit after financial items was SEK 359 m (362) for the period.
- Profit after tax totalled SEK 265 m (267) for the period, and earnings per share were SEK 5.06 (5.09).
- Ola Andersson resigned as President of Hemköpskedjan. Anders Strålman was appointed as Acting President.
- Axfood's goal for 2012 is to achieve an operating profit at the same level as in 2011.
Axfood AB conducts food retail and wholesale business in Sweden. Retail business is conducted through the wholly owned store chains Willys, Hemköp and PrisXtra, comprising 244 stores in all. In addition, Axfood collaborates with a number of proprietor-run stores that are tied to Axfood through agreements. These include stores within the Hemköp and Willys chains as well as stores run under the Handlar'n and Tempo profiles. In all, Axfood collaborates with approximately 820 proprietor-run stores. Wholesaling is conducted through Dagab and Axfood Närlivs. Axfood is listed on Nasdaq OMX Stockholm AB's Large Cap list. Axel Johnson AB is the principal owner, with 50,1% of the shares.
