X5 Retail Group showed a decrease of profit by 32.6%

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Season statements for the year ended and went already in the first quarter. Many companies in 2018 are not able yet to show their best side, so market participants shake up the portfolio, selling the “weak” paper.
One of these candidates remains X5. The company has submitted for review a report showing a decline in profits by 32.6%. At the same time, revenue grew by 19.9%. It happened because of the aggressive strategy of the retailer, which continues to strengthen the network and to open new stores in the regions. Another negative factor (so far) was the departure of the General Director of Pyaterochka Naumova.
Business owners have an opinion on the development of the network and its position was too great so she had to leave the post. You can see that the owners continue to engage in extensive increase of business, due to new stores, reducing overall efficiency, pushing this point for later. This approach has proven itself in the development of new niches, but for the assault already employed should be supported and occupied positions.
Paper X5 remain overvalued, as the multipliers and corporate news, so sales remain the main trend. For purchase in the portfolio, they are not yet ripe.
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Alexander Grigorenko,
Asset Manager
IR Global Capital