French electronics group Fnac Darty sees its sales decrease as consumers cut back on electronics spendings. The group sees possibilities to grow in Portugal, where it acquires the local MediaMarkt branch.
CEO sees resilience
CEO Enrique Martinez sees proof of “resilience” in his company’s results, pointing to an “excellent operational performance and tight control over costs and energy consumption” with a solid gross margin. In summing up the first half results this way, he shows a lot more positivity than the bare figures.
Indeed, like-for-like sales were down 2.3 % to 3.34 billion euros, mainly due to reduced purchasing power in France and Spain. Martinez, made a point of thanking his employees for being able to reopen shops so quickly after the riots in France. In Belgium and Luxembourg, there was no difference in the second quarter compared to a year earlier, while wage indexations actually added 1.7 % to sales over the half-year.
MediaMarkt Portugal becomes Fnac Darty
At the same time, comparable operating profit fell 4.7 %, mainly due to Spain and Portugal. In Belgium and Luxembourg, profits remained stable. The gross margin was 31.1 %. Excluding franchise activities, the margin increased by 35 basis points compared to a year ago.
After a turbulent six months, Fnac Darty is counting on improvement in the second half of the year. However, it is already clear that Black Friday and the year-end period “play a crucial role in the year’s results”, meaning aggressive promotions are likely then. Furthermore, the second half will be dominated by the completion of the acquisition of MediaMarkt in Portugal, which is expected at the end of September. Meanwhile, the group continues to look out for other acquisition opportunities.