Metcash shares drop over profit warning
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More news: Shares in Metcash are down more than 3% to $3.20 after it flagged a lower first-half underlying profit amid softening sales and margin pressure in the hardware segment.
The segment includes the Mitre 10, Total Tools and Home Timber & Hardware retail chains.
The group expects underlying profit between $132 million and $135 million for the first half of FY25, down from $142.5 million reported a year ago.
Metcash flags lower first-half profit
The news: Wholesaler Metcash expects to post a lower underlying first-half profit amid softening trading activity and margin pressure in the hardware segment.
The numbers: Metcash expects underlying profit between $132 million and $135 million for the first half of FY25, down from $142.5 million reported a year ago.
Group sales for the period to 20 October were up 6.3% from a year ago, with food sales up 18.5%, liquor sales up 2.1% and hardware sales up 2.8%.
The context: Metcash, which supplies the IGA supermarkets network as well as other independent retailers, said sales had remained strong and were buoyed by recent acquisitions.
Food sales were strong in a value-conscious shopping environment, while independent retailers continued to win market share in the liquor segment on the back of localised offers.
However, the external market for hardware continued to be very challenging with retail store margins in its IHG network under pressure amid sales weakness. The group said it is responding by implementing additional cost cutting initiatives and accelerating strategic initiatives to drive market share gains.
The source: ASX announcement
