Swedish retailer Axfood has reported ‘high growth and improved profitability’ in the first quarter of its financial year.
The company’s consolidated net sales during the quarter amounted to SEK13.1 billion (€1.2 billion), up 9.5%, from SEK11.9 billion (€1.1 billion) in the same period last year.
"Looking at the quarter as a whole, Axfood once again grew faster than the market," commented Axfood president and CEO, Klas Balkow.
Operating profit grew 12% year-on-year growth to SEK 544 million (€49.8 million), from SEK 485 million (€44.4 million) last year, with the company posting an operating margin of 4.2%.
Net profit for the period amounted to SEK402 million (€36.8 million), with the earnings per share before dilution at SEK 1.93.
Customer Behaviour
Axfood attributed strong sales during the quarter to the hoarding of groceries by customers in the wake of the coronavirus pandemic.
“Following a solid start to the year, the COVID-19 outbreak resulted in a dramatically changed shopping behaviour among consumers during the latter part of the quarter," Balkow explained.
“Virtually overnight, pressure on stores and our e-commerce operations increased as customers began hoarding basic groceries. The hoarding resulted in strong sales growth during the period, but it also put a major strain on the supply chain, which struggled to maintain a reasonable level of service.”
The company added that certain businesses within Axfood were affected during the quarter, including Axfood Snabbgross, Urban Deli, and Eurocash.
Dividend Payout
At its Annual General Meeting on 18 March, the company resolved to pay a shareholder dividend of SEK 7.25 (7.00) per share, in two installments.
The first dividend payment of SEK 3.75 per share was carried out in March and the second payment of SEK 3.50 per share is scheduled for September, Axfood added.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
