(Adds detail, background)
HELSINKI, June 12 Finnish department stores and
fashion chain Stockmann cut its outlook on Thursday
for the second time in two months, partly due to
weaker-than-expected demand at domestic stores.
The Finnish economy has shrunk for two straight years,
reflecting weak exports and a downturn elsewhere in Europe, and
lately the weakness has spread to private consumption, with
retailers feeling the impact.
The company's troubles were compounded by weak sales in
Russia, where the weaker rouble has made imported products more
expensive. Russia is Stockmann's second-biggest market.
Stockmann said May sales fell 8.3 percent from a year ago
and warned that without a considerable change in the market
environment in the latter half of the year, operating profit
would end up significantly weaker than in 2013, marking a second
outlook cut in two months.
On April 29, the company had said it expected 2014 operating
profit would not exceed the figure for 2013.
"Demand of non-food products has continued to be weaker than
expected in the Finnish market during the second quarter,"
Stockmann said on Thursday, adding that a weak Russian rouble
was also hurting results.
Stockmann's local rival Kesko said earlier on
Thursday its May sales fell 5.9 percent from the same month a
Stockmann shares were down 2.5 percent and Kesko's 2.4
percent by 1125 GMT.
(Reporting by Jussi Rosendahl and Sakari Suoninen; Editing by
Jason Neely and David Holmes)