Ceconomy Q3 Adj. EBIT Loss Narrows, Sales Down; Confirms Outlook

Ceconomy AG, the German consumer electronics retailer, reported a Q3 adjusted EBIT loss of €31 million, narrowing from €51 million last year, despite a reported sales decline to €4.8 billion. Crucially, sales increased 5.1% on a currency- and portfolio-adjusted basis, with online sales growing 12.2% to €1.1 billion. The company affirmed it is on track for its mid-term targets, projecting a moderate increase in currency- and portfolio-adjusted total sales and adjusted EBIT of approximately €375 million for fiscal 2025, driven by its DACH and Western/Southern Europe segments.

Analysis

Ceconomy AG's third-quarter results present a picture of underlying operational improvement masked by significant external headwinds. While reported sales declined slightly to €4.8 billion from €4.9 billion year-over-year, this figure was heavily distorted by the application of IAS 29 for hyperinflationary accounting in Türkiye and adverse foreign exchange movements. The key operational metric, currency- and portfolio-adjusted sales, reveals a robust 5.1% increase, signaling solid consumer demand in core markets. Furthermore, the company's digital strategy is showing strong results, with online sales growing 12.2% on an adjusted basis to approximately €1.1 billion. The adjusted EBIT loss narrowed to €31 million from a €51 million loss in the prior year, an improvement that aligns with typical seasonal weakness in the summer months. Crucially, management has reaffirmed its mid-term targets and provided confident guidance for fiscal 2025, projecting a moderate increase in adjusted sales and adjusted EBIT of around €375 million, driven by the DACH and Western/Southern Europe segments.

Key Decisions for Investors

• Investors should look beyond the headline sales decline and focus on the 5.1% currency-adjusted growth and the narrowing EBIT loss as stronger indicators of the company's fundamental health.
• The firm's reaffirmation of mid-term goals and its specific fiscal 2025 EBIT target of approximately €375 million provide a clear positive benchmark against which future performance can be measured.
• It is critical to continue monitoring the impact of foreign exchange rates and the accounting situation in Türkiye, as these factors will continue to create a divergence between reported and underlying operational results.