Ceconomy, the consumer-electronics retailer, has experienced a surge in shares following an upgrade in its outlook for the current fiscal year. As of 0831 GMT on Thursday, shares were up 5% at EUR2.72.
Strong Sales Growth Expected
Ceconomy now anticipates achieving a moderate sales growth for the year ending in September. Previously, the company had only expected a slight increase. Additionally, the company continues to aim for a clear increase in adjusted earnings before interest and taxes.
Positive Market Conditions
The guidance provided by Ceconomy is based on the assumption that macroeconomic conditions such as inflation, customer demand, and availability of goods do not deteriorate. This was highlighted by Baader Helvea analyst Volker Bosse in a research note.
Solid Third-Quarter Results
Ceconomy’s upgraded outlook comes alongside solid third-quarter results, according to Baader Helvea. In the April-June quarter, the company managed to narrow its adjusted EBIT loss to EUR60 million from EUR102 million in the same period last year. Sales fell 2.8% to EUR4.53 billion but rose 6.8% when measured on a like-for-like basis.
Positive Earnings and Cost Control
Ceconomy’s adjusted EBIT beat consensus expectations by 3%. This was partially attributed to effective cost control measures implemented by the company. However, group sales missed expectations by 6% due to hyperinflation effects in Turkey.