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HELSINKI, March 18 Finnish department store
chain Stockmann said the Ukrainian crisis had made it
more difficult to make forecasts for 2014 and could lead to
changes in its profit guidance.
Expansion in Russia had been one of the firm's strengths
over the past decade but a slowdown in the country's economy has
hit sales in the past year. Sanctions levied against Russia as
result of Moscow's seizure of Crimea could exacerbate the
Stockmann said sales so far this year had been very poor,
but that there had been an improvement in March.
"The Ukraine crisis is reducing the prospects for
forecasting the state of the economy," it said in a statement on
Tuesday after its annual shareholders' meeting.
"Stockmann is monitoring economic developments and will
update its guidance regarding the group's earnings performance
for 2014 if necessary."
Analysts said the vague formulation of the statement made it
difficult to gauge the risk of a profit warning.
"The fact that they wrote down the possibility of a guidance
downgrade, combined with weak sales early this year, gives rise
to the idea that the development (of the business) is not what
it was expected to be," said Nordea analyst Rauli Juva.
Last month, the company said it expected operating profit to
increase slightly in 2014 compared with 2013, when it stood at
54.4 million euros ($75.8 million).
Russian President Vladimir Putin, defying Ukrainian protests
and Western sanctions, signed a treaty on Tuesday making Crimea
part of Russia but said he did not plan to seize any other
regions of Ukraine.
Stockmann said the current political tensions and economic
climate could make it reconsider its strategy for Russia.
"A substantial weakening in the value of the rouble, a
decline in the purchasing power of Russian consumers, economic
sanctions imposed on Russia and possible counter-measures will
force Stockmann to carefully weigh up the future strategic
options for the entire company," it said, without elaborating.
Russia and Ukraine accounted for 17 percent of the company's
revenue in 2013, according to Thomson Reuters data.
Shares in the company were trading up 0.7 percent at 11.19
euros by 1525 GMT.
($1 = 0.7180 euros)
(Reporting by Sakari Suoninen; Editing by Pravin Char)