The Greek toys retailer Jumbo announced that the positive trend in revenues continued in November resulting in the increase of its 5-month sales above the annual target of 4%.
The company revised upwards its sales and net earnings guidance for FY14 with revenue growth at 4-6% (vs. initial target for 2-4%) and net earnings between EUR 80mln and 85mln (vs. initial target of 70-75 mln).
This positive performance is attributed to the sales increase in all three markets – Greece, Cyprus, Bulgaria – while one more store is expected to open in northern Greece in the second half of FY14 and will gradually start the renovation of the old stores.
“We remain more optimistic compared to Jumbo’s latest (upgraded) guidance for FY14, expecting sales growth to 7% y-o-y to EUR 538 mln and net earnings of EUR 102 mln (+37% y-o-y on a comparable basis) assuming a 100bps y-o-y improvement in the gross margin and flattish SGA/sales ratio,” said Dimitris Birbos, analyst at the Investment Bank of Greece, adding that “store openings are proceeding in line with our estimates.”
“We note the consensus (Bloomberg) forecast call for sales growth of 5.6% YoY and net profit of EUR 89 mln. We thus see significant upside risk on consensus numbers and reiterate our ‘Buy’ recommendation.”
Jumbo was last trading at 11.20 euros on the ASE, for a market cap of 1.46 bln.
Get all the latest news and videos in your inbox. Register FREE