OREANDA-NEWS. October 12, 2011. O’Key has just published its 9M11 operating data. Revenue increased a moderate 12% YoY to RUB64bn thanks to a 12% YoY increase in selling space (now totalling 300,000 m2) and 5.2% LfL sales growth. The latter was solely driven by an average ticket increase, up 6.0% YoY, as traffic declined over the period. In 3Q11 O’Key added only two new stores (the same number as in 1Q11) while we had expected the company to accelerate its openings. With respect to the selling-space increase, the retailer’s FY11 target of 30% YoY expansion looks difficult to attain. In 4Q11 O’Key would need to put approximately 80,000 m2 into operation which is the majority (86%) of the expansion figure planned for the full year.

Bottom line

We had hoped that O’Key would demonstrate accelerated store openings but this was not the case. The news is quite disappointing and negative for the stock in our view.

O'Key 9M/3Q11 trading update

 

 

 

 

 

 

 

9M11

9M10

YoY

3Q11

3Q10

YoY

Revenue (RUBmn)

64,212

57,566

12%

21,834

19,773

10%

LfL (%)

5.2%

7.8%

 

5.9%

9.6%

 

Traffic

-0.8%

5.5%

 

-0.8%

6.2%

 

Basket

6.0%

2.2%

 

6.7%

3.2%

 

Selling space ('000 m2)

300

267

12%

300

267

12%

Stores added over the period

4

7

 

2

1

 

Source: Company data

 

 

 

 

O'Key 2011 QoQ performance

 

 

3Q11

2Q11

1Q11

 

Revenue (RUBmn)

21,834

22,054

20,324

 

LfL (%)

5.9%

7.2%

2.3%

 

Traffic

-0.8%

1.0%

-2.8%

 

Basket

6.7%

6.1%

5.2%

 

Selling space ('000 m2)

300

293

293

 

Stores added over the period

2

0

2

 

 

Source: Company data