MOSCOW, Jan 26 (Reuters) - Russian food retailer Magnit reported on Friday a 42 percent decline in fourth-quarter net profit on the back of a slowdown in store openings and stiff competition.
Magnit’s discount stores are targeting lower income consumers but it has struggled to win shoppers in the economic downturn, losing ground to its closest rival X5.
Fourth-quarter net sales at Magnit were up 6.2 percent to 302.3 billion roubles ($5.4 billion), after a rise of 6.5 percent in the third quarter, while like-for-like sales fell 4.17 percent year on year.
Traffic in mature stores declined 2.27 percent year on year while the average ticket was down 1.95 percent, partly because food inflation in Russia fell.
There were also fewer new stores opened during October-December - Magnit added 653 outlets compared with 853 in the previous quarter and 695 in the fourth quarter of 2016.
The company also said it lost an estimated 1 billion roubles in sales due to a glitch in cash registers on Dec. 20.
Net profit came in at 7.86 billion roubles, down from 13.5 billion roubles a year earlier, as earnings before interest, taxation, depreciation and amortisation (EBITDA) fell 18.9 percent to 22.3 billion roubles.
The firm’s EBITDA margin slid to 7.38 percent from 9.67 percent in the last quarter of 2016, Magnit said in a statement.
Shares in Magnit were down 4.42 percent at 0820 GMT to 5,897 roubles.
X5 reported this week a 23.4 percent jump in fourth-quarter sales and a 3.5 percent increase in like-for-like sales, driven by low-cost Pyaterochka stores.
$1 = 55.7626 roubles Reporting by Maria Kiselyova