Detskiy Mir 1Q 20 Earnings Preview - Net loss driven by RUB depreciation is expected
Revenue should grow by 11.2% yoy: We expect the revenue to amount to RUB 31.0 bn, in line with the figure disclosed in the companys trading update on April 15.Gross margin expected to remain flat yoy at 29.0%: We expect a stable gross margin yoy of 29.0% as we think that Detskiy Mir did not make additional price investments compared to 1Q 19, particularly as it enjoyed elevated demand in the second half of March. As a result, we see gross profit growing in line with revenue at 11.2%.
Detskiy Mir PAO is a Russia-based company, which is primarily engaged in the children products retail sector. The Company offers a wide range of products, such as toys, clothing and footwear, baby goods, stationery, school and learning related products, creative kits, sport related products, food, car seats, furniture, among others. The Company's structure includes the chain of stores Detskiy Mir and the retail network ELC (Early Learning Center). The Company's Detskiy Mir chain comprises over 480 stores located on the territory of the Russian Federation and Kazakhstan, as well as more than 40 ECL stores. Detskiy Mir PAO is primarily active domestically and in the Commonwealth of Independent States (CIS) countries. In addition, the Company sells products online via its Website. The Company's major shareholder is AFK Sistema PAO.
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