Russian food retailer O'Key on Tuesday lowered its sales growth forecast for the year and pledged to reinforce project management to deliver on expansion plans.
"I believe that a realistic target for revenue growth is between 12 and 16 percent," said Chief Executive Tony Maher on a conference call.
O'Key replaced the previous CEO in January after he struggled to meet expansion targets. The company missed its new store opening guidance last year and forecast sales growth would slow to 15-19 percent in 2014 from 19 percent.
Maher also cut the like-for-like sales growth outlook to 5-6 percent from 5.5-6.5 percent, while confirming a core profit, or EBITDA margin forecast of 8 percent.
He said the company aimed to open eight hypermarkets, of which three had already opened, and five supermarkets this year, resulting in an around 14 percent increase in its selling space.
"The track record of our openings of the last 18 months has not been what we'd like. We are looking at making sure that we are opening stores not for the sake of opening them but opening in a way that is profitable... We just need stronger project management than we've had up to now," said Maher.
In the first quarter, the company's sales grew 12.7 percent to 35.1 billion roubles ($977.4 million) while like-for-like sales increased 4.1 percent on the back of inflation.
But the number of transactions in comparable stores dipped 2 percent which the company blamed on increased competition.
O'Key also said earlier on Tuesday that it swung to a first-quarter net loss of 22.2 million roubles from the year-ago profit of 144.5 million roubles due to foreign exchange losses and a tax charge related to the payment of dividends. (
