Russian retail giant Magnit has posted a like-for-like sales decline of 2.0% in the third quarter of its financial year, which is an improvement on the 5.2% decline that the group posted in the previous quarter.
The group said that the improvement in quarterly performance is as a result of better category management and more strategic promotional activity.
The best-performing division within the group was its Magnit Cosmetic banner, which posted a 3.9% increase in like-for-like sales in the third quarter, on the back of a 3.8% ticket increase and 0.1% traffic growth.
Revenue in the quarter increased by 8.4%, from RUB 286 billion (€3.82 billion) in the third quarter of 2017 to RUB 310 billion (€4.14 billion) in this most recent quarter.
Magnit added a net 482 new stores during the period, to take its total store count as of the end of Q3 2018 to 17,442 stores, including 12,813 convenience stores, 457 supermarkets and 4,172 drogerie stores.
Like-For-Like Gains
“At the first stage of transformation, the key indicator of the positive dynamics for us is the like-for-like improvement,” commented Olga Naumova, Magnit’s chief executive officer.
“For the first time this year, we see LFL trends changing. This improvement underlines that our customers have responded positively to the implemented changes in assortment and approach to promotional activity. We are already seeing cost improvements and continue to optimise our efficiency to maintain EBITDA margin,” added Naumova.
EBITDA for the quarter increased by 5.3% year on year, while EBITDA margin was 7.0%, which was lower due to the implementation of cost optimisation activities, according to the group.
Net income increased by 10%, from RUB 6.9 billion (€0.092 billion) in Q3 2017 to RUB 7.6 billion (€0.10 billion) in Q3 2018.
Naumova added, “[The group's] transformation strategy shows [its] first signs of recovery of consumer interest in our stores. We are confident that this is the solid base for further success of [the] Magnit team.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
