The group’s end-of-year sales were lower than expected, which could have an impact on its overall strategy.
Fnac Darty did not have a very good end-of-year celebrations and now expects this bad patch to continue into 2023.
Declining sales during the holiday season
Sales of the two brands fell by 55 million euros compared to the same period a year earlier. Inflation went through there, and the French had to tighten their belts during the holidays by reducing their spending on Christmas gifts.
Fnac Darty puts forward this explanation to justify this poor performance, indicating at the same time that the “small household appliances and household appliances” categories had suffered particularly at the end of the year.
Over the full year 2022, the group generated revenue of 7.9 billion euros, down slightly by 1.2% compared to 2021. It was well helped by the sales of cultural goods in Fnac stores, in particular thanks to the Pass Culture, massively used for manga purchases. At the same time, the operating result, he tumbles, with a fall of 15.1% for 230 million euros garnered.
A difficult situation for Fnac Darty, but some grounds for hope
The rise in prices and the decline in the purchasing power of the French will have a serious impact on the strategy of the distribution group. The latter aimed to generate a cash flow (or cash flow) of 500 million euros over the period 2021-2013. After a solid first year and 170 million euros generated, cash flow fell by 30 million euros in 2022.
Fnac Darty’s ambition is therefore no longer tenable, and its leaders have postponed their objective to 2024, leaving themselves an additional year to get through the economic crisis. This new calendar, despite a higher turnover than the period before the COVID crisis, is not at all to the taste of investors, and the Fnac Darty share price fell by 7.82% immediately after the announcement of these results.
Fnac Darty remains cautious in the face of a year 2023 which promises to be still difficult, particularly in the first half. Its CEO, Enrique
Martinez, however, believes that inflation should have reached its highest level and that the economic situation in Europe could improve in the coming months.
Source : The echoes
22