Portuguese retailer Jerónimo Martins has posted a 7.1% drop in third-quarter net profit as a strain on margins from lower food prices and lingering cost inflation offset higher sales.
The company said in a statement it made a net €187 million ($203 million) in the quarter, exceeding the €166 million average forecast by analysts polled by LSEG.
The EBITDA margin – a key measure of profitability – slipped to 6.6% in the first nine months from 7.1% a year earlier. The margin at the retailer's Polish market-leading chain Biedronka fell to 7.7% from 8.6% a year ago.
Chief executive Pedro Soares dos Santos said that the price pressures intensified competition and further strained profit margins.
"In this challenging context, we maintain our focus on sales while reinforcing cost discipline and seeking operational efficiency gains to protect profitability," he added.
Quarterly Sales
Consolidated sales rose 6.7% to €8.47 billion in the quarter, driven by sustained demand across all its brands, particularly in Poland, where sales reached €5.9 billion.
Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 1.2% to €593 million, above the average of €572 million expected by analysts.
However, Biedronka's like-for-like sales in Polish zlotys slipped by 1.9% in the quarter.
EBITDA fell by 0.7% (-6.6% in local currency), mainly due to price investments and the decision to increase the wages of its operational teams.
At home, sales at the Pingo Doce supermarket chain rose 2.7% to €1.3 billion, while in Colombia its Ara stores booked €694 million in sales, up 4.3% from a year earlier.
Pingo Doce witnessed volume growth, supported by enhanced differentiation of its value proposition, particularly in meal solutions, following the store remodelling programme designed to implement the All About Food concept, the company noted.
News by Reuters, additional reporting by ESM.
