Retail giant Kesko Group said it recorded its all-time best first-quarter results, despite the negative effects that the coronavirus epidemic have posed, according to a company stock exchange release issued on Tuesday.
Kesko reported comparable operating profits of 65.1 million euros during Q1 this year, compared to 57.5 million euros the same quarter last year. The firm estimated that overall operating profits for all of 2020 will be around 400-500 million euros, saying the projection falls “somewhat short” of the previous year’s profits of 461.6 million euros.
The government’s ongoing social distancing and stay-at-home recommendations due to the coronavirus outbreak have dramatically changed how consumers shop these days, particularly for groceries, as food products are increasingly ordered online for home delivery.
Kesko said it expects grocery sales to continue to grow. According to the firm, grocery sales rose in all chains in March by a rate of 9.8 percent, but noted that the epidemic started to impact operations significantly in mid-March.
Online sales boosted by up to 800% weekly
The company said its online grocery sales site had managed to become the biggest online grocery store in the country.
"At their highest, our online grocery sales have grown at a pace of over 800 percent a week. The closures of restaurants, schools and workplaces have pressed Kespro's sales to approximately 50 percent of normal levels in recent weeks," the company said, referring to its wholesale foods division.
Kesko’s net sales for the first three months of the year reached just over 2.5 billion euros, an increase of four percent from the corresponding period of the previous year.
"Despite the exceptional circumstances, Kesko recorded its all-time-best first-quarter comparable operating result. Our net sales increased by 5.8 percent, totalling [2.54 billion euros]. Our comparable operating profit totalled 65.1 million euros, representing an increase of 7.6 million euros," Kesko CEO Mikko Helander said in the statement.
Furloughs and adjustments
The firm also said it was making adjustments to deal with the uncertain times ahead. At the beginning of April, Kesko initiated negotiations with employee representatives to carry out temporary layoffs of around 2,500 workers. The firm also made cash flow adjustments, reducing investments to less than 200 million euros this year as well as increasing the availability of financing.
Kesko reported that sales within its building and technical trade division had been impacted slightly by the coronavirus situation, saying that its B2C building and home improvement trade has been good at operations in Finland as well as Sweden. Sales in the Baltic states have decreased, however, largely due to Lithuania ordering the closure of shops, according to the firm.
Meanhwhile, the company said sales of new and used vehicles were also down.
Kesko noted that it does not issue guidance on net sales figures.