UPDATE 1-China's GOME says Q3 net loss at 185.6 mln yuan
* Q3 loss at 185.6 mln yuan vs 539 mln profit Q3 2011
* 9-month gross profit margin 15.88 pct vs 18.85 pct yr ago
* Shares down 54 pct this year, lagging benchmark index
HONG KONG, Nov 19 (Reuters) - GOME Electrical Appliances Holdings Ltd, China's No.2 home appliance retail chain operator, swung to a loss in the third quarter from a profit a year earlier due to sluggish demand, rising costs and a loss at its e-commerce business.
GOME and bigger rival Suning Appliance, seen by some as China's answers to Best Buy Co Inc, are being pressured by weak consumer demand that has eroded spending on appliances such as televisions, refrigerators and washing machines.
Its net loss amounted to 185.6 million yuan ($29.76 million)for the July-September quarter, compared with a 539 million yuan profit a year go, according to Reuters' calculations based on nine-month earnings published on Monday.
GOME, which is backed by private equity firm Bain Capital, recorded a net loss of 686.7 million yuan for the nine months ended in September, against a 1.79 billion yuan profit a year earlier. Revenue fell 18 percent to 36.06 billion yuan.
In October, GOME had warned that it expected to report a net loss for January-September of between 600 million yuan and 700 million yuan due to a drop in sales revenue, an increase in staff and rental expenses, and a loss from the company's e-commerce business.
"The home appliance industry declined across all levels in the first half of 2012," GOME's chairman, Zhang Da Zhong, said in a statement. "With the macroeconomic recovery, rebound in consumption, economic stimulus policies taking effect and increasing supply of social housing, the home appliance industry has emerged from the most challenging period."
The decline in same store sales growth narrowed to 16.3 percent in the third quarter from 18.7 percent drop in the second and a 34.4 percent decline in the first, according to the company.
GOME opened 93 new stores and closed 102 underperforming stores, bringing its total network to 1,070 as of end-September.
Inventory turnover days in third quarter 2012 dropped to 65 days, down by 18 days year-on-year, it said.
Consolidated gross profit margin was at 15.88 percent during the nine months period as compared to 18.85 percent a year ago.
Shares of GOME, which have dropped 54 percent so far this year, were unchanged on Monday, lagging a 0.5 percent gain in the benchmark index.
Suning Appliance, China's top home appliance retailer, had in October reported a 37 percent fall in third-quarter profit to 598 million yuan. Its shares in Shenzhen fell 1.75 percent on Monday.
- Exclusive: Malaysia plane probe narrows on mid-air disintegration - source
- Radar showed missing plane may have turned back: Malaysia military
- Missing Malaysian jet may have disintegrated in mid-air: source |
- Malaysian plane presumed crashed; questions over false IDs |
- Merkel raps Putin as Russian forces tighten grip on Crimea |