Ceconomy, the German consumer-electronics retailer, has raised its guidance for fiscal year 2023. This optimistic forecast is a result of recent portfolio changes and the company’s ability to narrow its operating loss during the third quarter.
Raised Sales Expectations
Ceconomy now expects a moderate increase in sales for the year ending in September, surpassing the prior-year figure of 21.77 billion euros ($23.89 billion). This adjustment is more significant than the slight increase previously anticipated.
Strong Growth in Adjusted Earnings
The company continues to project a clear increase in adjusted earnings before interest and taxes. Ceconomy expects these earnings to surpass the EUR208 million recorded in fiscal year 2022.
Portfolio Changes Drive Optimism
Ceconomy attributes its improved outlook to recent portfolio changes, specifically related to the sale of its MediaMarkt Sweden and MediaMarkt Portugal businesses. These changes have bolstered the company’s overall performance.
Third Quarter Results
During the April-to-June quarter, Ceconomy managed to narrow its adjusted EBIT loss to EUR60 million from EUR102 million in the same period last year. However, there was a widening of the net loss to EUR186 million from EUR95 million.
Sales Performance
Despite challenges in the economic environment, Ceconomy reported a 2.8% decrease in sales, totaling EUR4.53 billion. However, on a like-for-like basis, quarterly sales experienced a notable 6.8% increase. This growth was primarily driven by strong performance in Eastern Europe, which offset sales declines in Western and Southern Europe. Additionally, there was also a modest 1.1% increase in sales within the German-speaking countries.
Ceconomy’s Chief Executive, Karsten Wildberger, expressed satisfaction with the company’s successful start to the second half of the financial year, acknowledging the ongoing challenges in the wider economic landscape.