Dutch store chain Hema saw its turnover drop nearly 3 % in Belgium and Luxembourg over the course of the first quarter, compared to the first quarter last year. Overall, its turnover did increase, but its net income dropped.
Net loss dropped slightly
Net turnover in Belgium and Luxembourg dropped 2.8 % to 33.1 million euro, but Hema's total turnover grew 3.2 % to 264.4 million euro with like-for-like turnover up 1.5 % mainly thanks to better Dutch results. Like-for-like turnover dropped 1.9 % last year.
Hema is disappointed with the results: higher operational costs and lower gross margins caused EBITDA to go down 50 % from 23.7 to 13.2 million euro. Higher costs were mainly the result of three different reasons: higher promotional expenses; temporary staff hired to implement commercial initiatives; more logistical expenses to deal with the increased volume of low-priced articles in the supply chain. On the other hand, the company did manage to lower its net loss from 22.2 million euro to 19.5 million euro.
Precarious results abroad
"Despite the encouraging like-for-like turnover development, we had a disappointing normalized EBIDTA in our first quarter. We have listed a number of priorities to help improve our performance, mainly focused on logistics, but it will take some time to reap the benefits though. Although the economic recovery seems to persist, we also remain cautious in our outlook", CEO Tjeerd Jegen said.
Hema France's turnover grew 26.4 % to 14.6 million euro, while the preliminary results for Hema stores in Spain and the United Kingdom were "encouraging".