Kesko raises its guidance for the comparable operating profit for its continuing operations, issued in connection with the company's interim report on
In the second quarter of 2020, net sales for continuing operations totalled approximately €2,815 million (Q2/2019: €2,781.4 million) and the comparable operating profit totalled approximately €155 million (Q2/2019: €122.5 million). Net sales and the comparable operating profit increased especially in the building and technical trade division. In the grocery trade division, net sales and profitability have developed well despite the decrease in sales in the foodservice business. The figures are based on preliminary unaudited information. Kesko will publish its 2020 half year financial report on
Guidance upgrade rationale
The profit guidance upgrade is based on better than anticipated net sales development in the building and technical trade division in various operating countries as well as in the grocery trade. Consumer sales have developed better than anticipated during the exceptional circumstances surrounding the epidemic. B2B sales have also continued stronger than anticipated in both building and home improvement stores and
In addition to the foodservice business, net sales have clearly decreased in the car trade. Adjustment measures carried out have enabled the company to manage the situation and costs in its various business operations under the challenging circumstances.
Although conditions surrounding the coronavirus have improved in Kesko's operating countries, it is hard to predict the development of the epidemic situation and its economic impact. Therefore, the range for the guidance on comparable operating profit for 2020 is still wide.
The previous outlook and guidance for 2020, issued in connection with the company's interim report on
"Outlook for
Kesko estimates that consumer demand for food will remain good despite the exceptional circumstances brought on by the COVID-19 pandemic. Sales are expected to grow in grocery stores and especially in the online sales of groceries. In the foodservice business and home and speciality goods trade, sales are expected to decrease.
Under the current circumstances, it is difficult to provide assessments on sales development in the building and technical trade. A weakening in the overall economy is expected to be reflected in sales to B2B customers. In addition, restrictions on store opening hours affect country-specific sales development in the building and technical trade division. In the car trade, both new and used car sales are expected to decrease compared to 2019.
Due to the weakened economic situation, Kesko has initiated extensive cost adjustment measures to ensure profitability and secure cash flow. The measures include temporary personnel lay-offs and extensive adjustment of other costs."
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