Although Suning Tesco is still in a difficult stage, it is making every effort to promote the recovery of production and operation and business development. In the first three quarters of the performance forecast released on October 15, Suning made an objective statement about its own situation.
According to the data, suning Tesco's net profit attributable to shareholders of listed companies in the first three quarters was 7.352 billion yuan - 7.752 billion yuan. However, Suning has set a specific goal to turn around losses, that is, to reduce costs and increase efficiency and increase revenue at the same time, and strive to achieve a positive EBITDA (EBITDA) of the core electrical appliance 3C business in the fourth quarter.
The loss in the first three quarters exceeded 7 billion yuan
From the resignation of founder Zhang Jindong on July 12 to the appointment of Huang Mingduan, nominated by Alibaba, to become the seventh chairman of Suning Tesco on July 29, the mixed reform has brought Suning Tesco to a new development node.
However, the new management did not allow Suning Tesco to quickly get out of the quagmire of losses. According to the first three quarters of the performance forecast released on October 15, the data shows that the net profit attributable to the shareholders of the listed company in the third quarter was 3.9 billion yuan - 4.3 billion yuan. Excluding Suning Financial's investment income and the impact of Carrefour, the net profit loss attributable to shareholders of listed companies in the third quarter was about 3.05 billion yuan - 3.45 billion yuan. The net profit loss attributable to shareholders of listed companies in the first three quarters was 7.352 billion yuan - 7.752 billion yuan.
In the explanation of the reasons for the change in performance, Suning Tesco looked directly at the company's capital chain problem with the sentence "In June and July, the company encountered serious liquidity pressure". The direct consequence of liquidity pressure is that the supply of commodities is seriously insufficient, and even by the end of July, the inventory commodity scale of the company's core electrical appliance 3C business was only about 30% of the normal operating period at the lowest.
In addition, the sharp compression of corporate operating expenses has seriously affected the realization of terminal channel sales targets, which overall makes the company's operating income in the third quarter expected to decline sharply year-on-year, and thus cause a sharp year-on-year decline in gross profit. The announcement also said that although the company continues to strictly control various expenses, it will take a while for the adjustment effect to be revealed.
Thankfully, however, Suning's losses have shown signs of improvement. For example, although the third quarter was a loss, compared with the net loss of 3.452 billion yuan in the second quarter, it has narrowed.
Self-identification is still in a difficult phase
It has been less than three months since the company's new management surfaced on July 29. It is too early to draw conclusions about what kind of answer sheet the new team will hand over.
However, this newly released performance forecast is very pragmatic, directly acknowledging that the current Suning Tesco is still in a difficult stage, and also pointing out that the main difficulty should be the liquidity of funds.
As a result, the current Suning Tesco has done enough to continue to strictly control various expenses, and the personnel cost in the third quarter alone fell by about 35% from the second quarter and decreased by about 37% year-on-year; at the same time, the adjustment of loss-making stores and the work of store lease reduction and sublease investment, leasing costs fell by about 13.5% month-on-month and about 18% year-on-year. Most notably, marketing expenses, down about 70% sequentially and about 80% year-over-year in the third quarter.
Overall, third-quarter expenses fell by about 10% further from the second quarter and decreased by about 27% from the same period last year. At the same time, in the announcement, Suning Tesco stated that it will continue to promote the decline in expenses month by month in the fourth quarter, and there is still room for potential in terms of personnel costs and storage costs; in addition, it is necessary to strengthen the optimization of organization and incentives, improve human efficiency, organizational efficiency and the level of cost input and output.
Back to where it should be
"Let Suning Tesco return to the market position that we should have, this is the self-improvement we should have." This is an open letter from chairman Huang Mingduan and president Ren Jun on August 11, ten days after the new management took office.
Suning Tesco, which is already "thirty years old", although it was shouting to all employees through the "818th anniversary celebration", at the same time it was more like shouting to the market and showing its attitude to the strategic shareholders who newly joined Suning.
Throttling is in the front, but it cannot fundamentally solve the problem, and the clearest choice is to open source "behind the temple". Continue to promote liquidity improvement and inventory level recovery, and further enhance the core capacity building of each channel in the direction of recovery of valuable sales and sustainable growth. This is the main focus of Suning Tesco's next step.
Suning Tesco retail cloud is the highlight of the current company, the first three quarters of the opening of 2085 new franchise stores, overall the speed of opening stores is accelerating, to the fourth quarter will still maintain a rapid development speed.
Suning Tesco is very clear that in order to return to the market position, it must first start from returning to the market positioning that should be there, and the original intention must be to make a fuss around the development of retail service provider business.
It is understood that suning Tesco's 10,000th store is about to be completed, with the upgrading of consumer institutions in the sinking market, Suning, which has been deeply engaged in the retail service industry for 30 years, has seized the opportunity in the layout of C2M reverse customization. Previously, the relevant person in charge of Suning Tesco said that customized high-end, set home appliances will become one of the key points of the company's next stage of retail cloud deployment in the county and town markets.
At the same time, the traditional drama came as promised. Suning Tesco, which has fought from the price war, announced the plan of "Double Eleven" in 2021 while releasing the performance forecast for the first three quarters. Or the familiar Suning Tesco, focusing on home improvement consumption of home appliances, two-line integration, Suning Tesco main station, Tmall Suning Tesco flagship store, offline store, retail cloud store four major channels fully coordinated.
Can we get back to where we should be? In the fourth quarter of this year, the new management of Suning Tesco will officially write its own answer.
This article originated from Lanfu Finance