Quotes “Magnet” went down after the company reported a fall in quarterly profit

Net profit “Magnet” for the first three months of 2016 amounted to $ 8,243 billion rubles against 9,477 billion rubles in the first quarter of 2015, reports the company. Thus, the ruble quarterly profit of “Magnet” in annual terms, decreased by 13,03%. In dollar terms the company’s profits fell by 27,52%, from $152,4 million to $110,46 million

At the same time, the revenue of “Magnet” has continued to grow over January—March 2016 it was 255,3 billion rubles, which is 16,71% over the first quarter of 2015. The largest growth showed a drogerie stores selling non-food consumer goods (cosmetics, perfumes, hygienic goods), the revenue of which at the beginning of 2016 doubled, reaching 13,937 billion rubles (+90,84%). However, the greatest contribution to total revenue, as before, made a stores, which accounted for more than 187.5 billion rubles (+15.32 percent to the first quarter of 2015).

The total number of customers in the stores “Magnet” in January—March 2016 increased by 16.6%. One of the main reasons for the increase was the increase in the number of retailer-owned outlets — during the quarter their number increased by 345 units (121 “shop at home”, 6 hypermarkets, 2 “Magnit family” stores and 216 drogerie), which increased the total retail space at 21,19% (up to 4,523 million square meters).

The cumulative result of the “old” shops “Magnet” (excluding outlets opened after March 1, 2015) was much more modest — their revenue in the first quarter of 2016 grew by only 0.44 percent, while the number of clients — 1.46%.

Previously published in the company report it was also noted that one of the growth factors was the fact that in 2016 in February was 29 days and not 28 like in 2015.

After the publication of statements “Magnet” quotes of the company’s shares on the Moscow stock exchange went down. At a minimum the value of the securities fell to a 9 655 thousand rubles, which is 6.2% below the closing level of the previous trading session. Previously, analysts had noted the risk of reducing the value of the shares of “Magnet”.

“The retailer has long been a market leader, but in the last few quarters a little slowed down this year demonstrates only average growth. Although Magnit is the leader in terms of profitability, which at least partially justifies its premium valuation to other companies in the sector, we see the risk of reduction of prices”, — said the analyst “Uralsiba” Konstantin Belov.