Page 139 - RusRPTMar21

is well above our DPS forecast of RUB4.5/share.
Mid-term and FY21 guidance remains intact. The company reiterated its mid-term expansion guidance of at least 230 core Detsky Mir supermarket openings through 2023, as well as 800 Detmir Pickup stores and 500 Zoozavr stores by 2024. This includes at least 70 Detsky Mir supermarkets, 100 Detmir Pickup stores and 70 Zoozavr stores to be opened this year. The retailer plans to double its business over the next four years, which should be driven by omnichannel sales (with the online share reaching 45% by 2024 vs. 24% in 2020).
OR Group, formerly Obuv Rossii, has released its 4Q20 trading results.
Consolidated revenues were down 17% y-o-y at R3.8 bln on a 20% LFL sales contraction (the worst showing on record). The revenue decline was on par with the 17% decline reported in 3Q20, though that had followed a 56% drop in 2Q20 and therefore was regarded as a rebound.
Total retail sales were down 30% y-o-y, as sales in new categories provided by third parties failed to offset a decrease in sales of own apparel (which halved y-o-y). Sales of third-party assortment reached R563 mln, a little below our expectations, which we attribute to weak discretionary spending in the economy as a whole. Meanwhile, revenues generated by the cash loan business, the most profitable for the company, increased 11% y-o-y, thanks to a 23% increase in the average cash loan size. On the negative side, the amount of cash loans made declined 23% y-o-y to R1.3 bln, suggesting diminishing returns on loans in 2021.
During 4Q20, the company closed 11 directly operated stores (DOS) on a net basis, taking the DOS count to 665, down from 736 a year before.
Given the current economic backdrop, which is still being dampened by the pandemic, the fashion industry (and sectors driven by discretionary spending in general) remains under pressure. For Obuv Rossii, this has translated into a slower than initially expected ramp-up of third-party merchandise sales and a generally depressed performance. On a positive note, the most profitable cash loan segment has picked up momentum, with its share in revenues on the rise, which should support margins. The reported 4Q20 numbers are in line with our forecasts, and we reiterate our HOLD recommendation.
Obuv Rossii (OR Group has reported its January trading update, which featured a consolidated revenue decline of 18% y/y, to RUB815mn.
The revenues of the westfalika.ru platform amounted to RUB266mn, with 23% of the respective sales conducted online. Wholesale revenues declined 20% y/y (RUB332mn), while the cash loans segment was flat y/y (RUB218mn). The total loan portfolio reached RUB2.9bn.
139 RUSSIA Country Report March 2021 www.intellinews.com