Fnac Darty beats full-year targets as shoppers return to stores

Shops prepare to reopen in Paris
A staff member works during preparations for the reopening of a Fnac store in Paris as part of an easing of the country's lockdown restrictions amid the coronavirus disease (COVID-19) outbreak in France, May 18, 2021. REUTERS/Sarah Meyssonnier

Feb 23 (Reuters) - Fnac Darty on Wednesday reported better than expected annual earnings, helped by robust sales growth across its product categories as consumers returned to its stores.

Retailers have seen their in-store sales rebound in recent months as vaccinations and easing pandemic restrictions encouraged shoppers to return after months of closures.

The French books, music and electrical equipment retailer posted current operating income of 271 million euros ($306.61 million), slightly above its own guidance which predicted the figure to be at the upper end of a 260-270 million euro range.

The re-opening of stores particularly benefited sales of editorial products and services, while the group's ticketing business has started to recover gradually.

The group did not provide an outlook for 2022, remaining cautious about the evolution of its markets.

"I see 2022 as a year that is going to be (...) a bit uncertain in terms of market behaviour with inflationary pressures (and) the presidential elections in France," the group's CFO Jean-Brieuc Le Tinier said in a call with journalists.

France saw inflation surge over the last year to a 13-year high, but the central bank expects it to moderate in 2022, with first signs of stabilisation visible in January, when it dropped to 3.3% from 3.4% a month earlier on lower prices for manufactured goods due to winter sales. read more

The retailer did however confirm mid-term targets of a cumulative free cash flow from operations of around 500 million euros over the period 2021-2023, and a free cash flow from operations of at least 240 million euros on an annual basis from 2025.

In the last year, Fnac Darty gained 5 million active online customers, it said, with online sales accounting for 26% of its total turnover of 8 billion euros.

In a separate statement, it also announced a new partnership with Alphabet Inc's Google (GOOGL.O), under which Fnac Darty websites will use the tech giant's Cloud Retail solution to improve product search. read more

The group plans to pay an ordinary dividend of 2 euros per share, representing a payout ratio of 37%.

($1 = 0.8839 euros)

Reporting by Dagmarah Mackos; editing by David Evans

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