STOCKMANN'S FINANCIAL STATEMENT BULLETIN 2006

2/8/2007, 12:58 PM (Source: GlobeNewswire)



STOCKMANN plc STOCK EXCHANGE RELEASE February 8, 2007, at 13.40

The Stockmann Group reported its best-ever earnings. Profit before
taxes increased by 25 per cent and was EUR 128.9 million (EUR 102.8
million in 2005). The earnings trend abroad was especially positive.
Other operating income amounted to EUR 34.4 million. As a consequence
of disposals, aggregate sales decreased by 16 per cent to EUR 1 552.7
million (EUR 1 851.3 million in 2005). Sales from continuing
operations increased by 6.3 per cent. The Department Store Division
posted record earnings, and Hobby Hall's operating profit also
improved. Seppälä's operating profit decreased from the peak level
reached a year ago. The return on capital employed increased and was
22.9 per cent. Earnings per share increased to EUR 1.93, as against
EUR 1.44 a year ago. The Board of Directors will propose the payment
of a dividend of EUR 1.30 per share.

Changes in the Group structure

Stockmann sold the entire shares outstanding in its subsidiary
Stockmann Auto Oy Ab as from March 1, 2006, for a total debt-free
price of EUR 67.9 million. The capital gain on the transactions was a
total of EUR 7.4 million. Concurrently, Stockmann and Veho Group Oy
Ab launched wide-ranging loyal customer cooperation in the area of
vehicle sales and services.

Stockmann sold its subsidiary that carries on the Zara business in
Russia to the owner of the Zara trademark, the Inditex Group of
Spain, under an agreement signed on January 30, 2006. Pursuant to the
agreement that was made, operations in Russia have been carried out
for Inditex's account as from January 1, 2006. The State Antimonopoly
Committee of the Russian Federation approved the sale of shares in
June, and the deal closed at the end of June. The purchase price was
EUR 41.5 million and the capital gain on the sale of shares was EUR
21.9 million. Stockmann continues the Zara business in Finland.

Sales and result

The Stockmann Group's sales from continuing operations grew by 6 per
cent to EUR 1 477.8 million. Sales from continuing operations grew by
2 per cent in Finland and 25 per cent abroad. Sales generated by
international operations grew, accounting for 24 per cent of sales
from continuing operations (20 per cent). As a consequence of
disposals, the Group's aggregate sales decreased by 16 per cent to
EUR 1 552.7 million (EUR 1 851.3 million). Similarly, consolidated
revenue diminished by 16 per cent to EUR 1 300.7 million (EUR 1 542.6
million).

The gross margin on continuing operations improved by EUR 37.2
million to EUR 518.5 million. However, because the divested
businesses were no longer included in the gross margin, the Group's
aggregate gross margin decreased by EUR 20.1 million and was EUR
527.0 million. The relative gross margin was 40.5 per cent (35.5 per
cent). The relative gross margin increased at Hobby Hall and the
Department Store Division, but was down slightly at the Seppälä
units. The change in the sales mix contributed to improving the
Group's relative gross margin because low-margin vehicle sales were
discontinued from the beginning of March. Operating costs were down
EUR 14.9 million and depreciation decreased by EUR 3.7 million.
Operating profit was up EUR 25.8 million to EUR 129.5 million (EUR
103.7 million). Operating profit was 10.0 per cent of revenue (6.7
per cent). Operating profit generated by continuing operations
improved by EUR 4.3 million to EUR 99.9 million.

Other operating income, EUR 34.4 million, came from the capital gains
on the disposals of Stockmann Auto and the Zara business in Russia,
from the capital gain on the unbuilt part of a plot of land in
Tallinn as well as from a capital gain on the sale of Hobby Hall's
office premises. The capital gain on the portion of the plot in
Tallinn, EUR 4.7 million, and the capital gain on the office
premises, EUR 0.4 million, are included in continuing operations.
Other operating income in 2005 amounted to EUR 7.0 million.

Net financial income and expenses increased by EUR 0.3 million and
were EUR 0.6 million negative (EUR 0.9 million negative). Capital
gains of EUR 0.8 million on sales of shares were included in net
financial income and expenses, as against EUR 0.9 million a year
earlier.

Profit before taxes was EUR 129.0 million, up EUR 26.1 million on the
figure a year earlier. Profit from continuing operations before taxes
increased by EUR 5.5 million to EUR 99.4 million.

Direct taxes were EUR 24.3 million, decreasing by EUR 1.7 million on
the figure a year earlier. The capital gains on the sale of the
shares in Stockmann Auto Oy Ab and in the company carrying on the
Zara business in Russia, EUR 29.3 million, are tax-free income.

Net profit for the financial year was EUR 104.7 million, compared
with EUR 76.9 million a year earlier. Net profit for the financial
year from continuing operations increased by EUR 5.3 million to EUR
75.2 million.

Earnings per share were EUR 1.93 (EUR 1.44) and diluted for options
they were EUR 1.90 (EUR 1.42). Earnings per share from continuing
operations were EUR 1.39 (EUR 1.31) and diluted for options they were
EUR 1.37 (EUR 1.29). Equity per share was EUR 10.34 (EUR 9.34).

New long-term financial targets

Reflecting the change in Stockmann's Group structure, the Board of
Directors confirmed in June the Group's new financial targets up to
2011. The objective is for the Group's return on capital employed to
reach 22 per cent in 2011, with an operating profit margin of 10 per
cent. The other financial targets - an equity ratio of at least 50
per cent and sales growth that outpaces the market average - are
unchanged. The dividend policy likewise will remain unchanged: the
objective is to pay dividends amounting to more than 50 per cent of
the profit on ordinary operations, nevertheless taking into account
the financing required to grow the business. The Board of Directors
estimates that in 2011, international operations will account for
about half of the Group's sales and earnings.

Sales and earnings trend by operating unit

The Department Store Division's sales grew by 9 per cent to EUR 1
119.0 million (EUR 1 024.1 million). Sales in Finland were up 4 per
cent. Sales were spurred by the new department store that was opened
in the Jumbo Shopping Centre in Vantaa in October 2005. The extensive
enlargement and renovation work in the Helsinki department store,
causing about 2 000-3 000 square metres of retail space to be
continuously out of use, has not had a greater-than-anticipated
impact on the main department store's sales, though many new shopping
centres have been opened in the Helsinki metropolitan area over the
same period. Sales growth was weakened by the exceptional weather
conditions all year long. International Operations' sales were lifted
by the good like-for-like retail performance by the department stores
in Russia and the Baltic countries as well as by the new Bestseller
stores that were opened in Russia. Sales by International Operations
grew by 26 per cent and their share of the division's sales rose to
26 per cent (22 per cent). The Department Store Division's operating
profit increased by EUR 14.1 million to EUR 79.5 million (EUR 65.4
million), which is the best-ever result. In Finland, earnings were
down slightly, primarily as a consequence of the costs and operating
inconveniences caused by the expansion and refurbishment works at the
Helsinki department store. Earnings from International Operations
showed a very positive trend. In Riga and Moscow in particular, the
results of the department stores that were opened in 2003 and 2004
improved markedly. The Department Store Division's result was also
buoyed by the EUR 4.7 million capital gain on the sale of the unbuilt
portion of the department store plot that was sold in Tallinn. The
return on capital employed was 21.2 per cent (19.7 per cent).

Because of a development programme aiming at improving profitability,
Hobby Hall's sales were down 5 per cent to EUR 199.8 million (EUR
210.5 million). Sales abroad were 16 per cent of aggregate sales (16
per cent). Online sales continued their robust growth, making up 47
per cent of Hobby Hall's distance sales in Finland (36 per cent) and
33 per cent of Hobby Hall's distance sales in Estonia (21 per cent).
An online store was opened in Latvia in the autumn, and it got off to
a promising start. Thanks to effective cost management and the
increase in the relative gross margin that was achieved through a
revamped product assortment, Hobby Hall's operating profit improved
by EUR 1.0 million to EUR 7.1 million (EUR 6.1 million). The
operating profit figure includes the EUR 0.4 million capital gain on
the disposal of Hobby Hall's office premises. In autumn 2006, Hobby
Hall conducted test marketing for mail order sales in the Moscow
area, during which it tested factors such as how distance retailing
logistics work in Russia. On the basis of test marketing, it was
decided to launch mail order sales in Russia in autumn 2007. The
return on capital employed was 7.7 per cent (7.0 per cent).

Seppälä's sales rose by 2 per cent and were EUR 158.1 million (EUR
155.2 million). Sales grew strongly in the Baltic countries and
Russia, where they were boosted by the new stores that were opened
towards the end of 2005 and in 2006 as well as by the good
like-for-like sales trend. Seppälä's sales abroad grew by 51 per cent
and its share of the division's aggregate sales rose to 22 per cent
(15 per cent). Sales in Finland fell by 7 per cent. Seppälä's number
of stores in Finland was unchanged over nearly the whole year, and
competition hotted up, with new shopping centres and stores opening
both in the Helsinki metropolitan area and in the smaller regional
centres. Furthermore, the exceptional weather conditions throughout
the year hampered sales, particularly in Finland. Seppälä's relative
gross margin decreased slightly on the comparison period but was at a
high level on an international yardstick. Due to the energetic
establishment of new stores in Russia and the Baltic countries, fixed
costs rose more swiftly than sales. Seppälä's operating profit was
EUR 21.1 million (EUR 31.1 million). Operating profit in the
comparison period includes EUR 5.6 million of capital gains on the
sale of shares. The return on capital employed was 92 per cent,
against 156 per cent a year earlier.

Stockmann Auto's sales in January-February were EUR 74.8 million and
it reported operating profit of EUR 7.7 million. The operating profit
figure includes the EUR 7.4 million capital gain on the disposal of
the Stockmann Auto businesses. Stockmann Auto was transferred to the
new owners on March 1, 2006.

Financing and capital employed

Stockmann's financial position remained strong. Interest-bearing
liabilities at the end of the year were EUR 23.4 million (EUR 47.2
million), and they were entirely comprised of long-term borrowings
(EUR 13.7 million). During the year, EUR 10.0 million of new
long-term borrowings was drawn down. Liquid assets totalled EUR 59.2
million at the end of the year, compared with EUR 18.4 million a year
earlier. Gross capital expenditures amounted to EUR 125.5 million.
The proceeds from disposals of businesses and properties generated a
total of EUR 114.7 million in cash. Net working capital at the end of
the year was EUR 194.5 million, compared with EUR 237.9 million a
year earlier. Dividend payouts totalled EUR 59.5 million. Share
subscriptions made by exercising the 2000 share options added EUR
19.5 million to shareholders' equity. The equity ratio increased on
the comparison period and was 74.5 per cent (66.4 per cent).

ROCE improved in line with higher earnings and was 22.9 per cent
(19.6 per cent). The Group's capital employed increased by EUR 42.4
million and was EUR 595.0 million (EUR 552.5 million) at the end of
the year.

Dividends

For the financial year 2005, in accordance with the resolution of the
Annual General Meeting, a dividend of EUR 1.10 per share was paid, or
a total of EUR 59.5 million. The Board of Directors will propose to
the Annual General Meeting that a dividend of EUR 1.30 per share be
paid for the 2006 financial year. The proposed dividend is 67.4 per
cent of earnings per share.

Capital expenditures and current projects

Capital expenditures in 2006 totalled EUR 125.5 million (EUR 57.0
million). Investments in operations abroad came to EUR 61.5 million,
or 49 per cent of total investments.

The construction works for the major enlargement and transformation
project for the department store in the centre of Helsinki got under
way in the early part of the year. The project involves expanding the
department store's commercial premises by about 10 000 square metres
by converting existing premises to commercial use and by building new
retail space. In addition, completely new goods handling, servicing
and customer parking areas will be built. After the enlargement the
Helsinki department store will have a total of about 50 000 square
metres of retail space. The project has a cost estimate of about EUR
145 million. The works will be carried out stage by stage and are
estimated to reach completion in 2010. During 2006, the project
required an investment of EUR 46.7 million.

In 2006, two Stockmann Beauty stores were opened, bringing their
total number to 13 at the end of the year. During 2006, seven
Bestseller stores were opened in Russia: three in St Petersburg and
one each in Moscow, Kazan, Yekaterinburg and Nizhny Novgorod. So far,
a total of 11 Bestseller stores have been opened in Russia. The
objective is to further expand the chain of Bestseller stores during
2007.


In February 2007, the Department Store Division will open a fourth
department store in Moscow in the Mega Shopping Centre that is to be
built on the southeast side. The cost estimate for the department
store - to be built in leased premises - is about EUR 16 million for
Stockmann's part of the investment.

Under an agreement signed in 2005, Stockmann purchased a 10 000-odd
square metre commercial plot on Nevsky Prospect, St Petersburg's high
street. The plot is located next to the Vosstaniya Square underground
station, in the immediate vicinity of Moscow Station. On this plot,
Stockmann will erect the Nevsky Centre shopping centre that will have
about 100 000 square metres of gross floor space, of which about 50
000 square metres will be store and office space. A full-scale
Stockmann department store with about 20 000 square metres of retail
space has been planned for the shopping centre, along with other
retail stores, office premises and an underground car park. The
department store and shopping centre investment will have a price tag
of about EUR 135 million. On the plot for the Nevsky Centre
development, the old buildings have been torn down, and the actual
construction works have got under way. An agreement on the general
contract was signed at the beginning of October. Stockmann's
objective is to open the department store and commercial centre in
autumn 2008. The purchase and development of the property called for
an outlay of EUR 32.8 million during the financial year.

At the beginning of August, Stockmann signed a preliminary agreement
on opening Moscow's fifth Stockmann department store in leased
premises in the Metropolis Shopping Centre that is to be built right
near the city's centre. The department store will have a total of
more than 8 000 square metres of retail space, and Stockmann's
investment in the project will be about EUR 12 million. The
objective is to open the department store in 2008.

In August, Stockmann and Nike concluded a franchising agreement on
establishing Stockmann-operated Nike stores in Russia. The objective
is to achieve a substantial increase in sales of Nike sports products
in the area of the Russian Federation. Stockmann is planning to open
a number of new Nike stores in Russia every year. The first two Nike
stores operated by Stockmann will be opened in February 2007 in St
Petersburg.

The Department Store Division's capital expenditures came to EUR
115.3 million.

Hobby Hall's capital expenditures amounted to EUR 3.2 million.
Investments went mainly for information systems. Hobby Hall launched
distance retailing in Lithuania in February 2007 and will launch
distance retailing in Russia during autumn 2007.

Seppälä's capital expenditures came to EUR 6.1 million. In Russia,
during 2006 Seppälä opened four stores in St Petersburg, two in
Kazan, two in Yekaterinburg, one in Moscow and one in Nizhny
Novgorod. In addition, one store was opened in Riga, Latvia, and one
in Vilnius, Lithuania. In 2006, the number of stores in Finland grew
by one. Seppälä is planning to expand its operations to Ukraine, a
new market area, in 2007. Seppälä's objective is to open a total of
10-15 stores in Russia and the Baltic countries during 2007 and to
start operations in Ukraine.

Other capital expenditures during the financial year came to EUR 0.9
million.

Capital expenditures in 2007 are estimated to amount to about EUR 150
million. The biggest investment items are the enlargement and
transformation project for the department store in the centre of
Helsinki and the construction works of the department store and
shopping centre in St Petersburg.

Shares and shareholders

The company's market capitalization increased by EUR 267.3 million
during the year and stood at EUR 2 028.6 million at the end of the
year (EUR 1 761.3 million).

Stockmann's share prices underperformed both the OMX Helsinki index
and the OMX Helsinki Cap index during the financial year. At the end
of the year the stock exchange price of the Series A share was EUR
36.40, compared with EUR 32.11 at the end of 2005, and the Series B
share was selling at EUR 36.48, as against EUR 32.53 at the end of
2005.

During 2006 the share capital was increased by a total of EUR 2.7
million, corresponding to the subscriptions for 1 371 861 Series B
shares made with the 2000 share options. The share capital increases
were entered in the Trade Register to the amount of EUR 168 100 on
May 17, 2006, EUR 402 200 on June 29, 2006, EUR 72 300 on August 25,
2006, EUR 166 400 on October 10, 2006, EUR 312 484 on November 10,
2006, and EUR 1 236 508 on December 18, 2006. In respect of the 192
865 Series B shares subscribed for at the end of 2006, the Board of
Directors approved the subscription at its meeting held on February
8, 2007. The share capital increase is EUR 385 730. In addition, in
respect of the 23 350 Series B shares subscribed for with 2000 share
options in December 2005, the share capital increase was entered in
the Trade Register on February 28, 2006.

By exercising the A, B and C share options for 2000, which are quoted
on the Helsinki Stock Exchange, further subscriptions can be made for
a total of 238 909 new Series B shares with a par value of 2 euros.
The subscription price for shares to be subscribed for by exercising
the A options, after the dividend to be paid out in 2006, is EUR
11.55; the price through exercise of the B options is EUR 12.55, and
the price through exercise of the C options is EUR 13.55 per share.
The subscription period for shares to be subscribed for by exercising
the share options for 2000 ends on April 1, 2007.

After the above-mentioned increases, the share capital stands at EUR
111 709 806. The total number of Series A shares is 24 564 243 and
the total number of Series B shares is 31 290 660.

Stockmann held 382 903 of its own Series B shares (treasury shares)
at the end of 2006, and they represented 0.7 per cent of all the
shares outstanding and 0.1 per cent of all the votes. The shares were
bought back at a total price of EUR 5.8 million.

The Annual General Meeting in 2006 granted to the Board of Directors
one-year authorizations to decide on the transfer of the company's
treasury shares. The Board of Directors will again request the Annual
General Meeting for authorizations for five years for the purpose of
transferring treasury shares. The company's Board of Directors does
not have valid authorizations to increase the share capital, to float
issues of convertible bonds or bonds with warrants, or to buy back
own shares.

Loyal Customer and key employee share option scheme

The 2006 Annual General Meeting approved the Board of Directors'
proposal on the granting of share options to Stockmann's Loyal
Customers. A total maximum of 2 500 000 share options will be granted
without consideration to Stockmann's Loyal Customers in
disapplication of shareholders' pre-emptive subscription rights. The
subscription rights are to be disapplied because by granting the
share options, Stockmann will offer Loyal Customers a benefit that
rewards them for their continued patronage and at the same time
improves Stockmann's competitive position. The share options will be
granted to Loyal Customers whose purchases during January 1, 2006 -
December 31, 2007, together with purchases made on parallel cards for
the same account, are at least EUR 6 000 in total amount. For
purchases of at least EUR 6 000, a Loyal Customer will receive 20
share options without consideration. In addition, for each full 500
euros by which the purchases exceed EUR 6 000, the Loyal Customer
will receive an additional two share options. Each share option will
entitle its holder to subscribe for one Stockmann plc Series B share.
The subscription price is the volume-weighted average price of the
Series B share on the Helsinki Stock Exchange during the period
February 1 - February 28, 2006, which is EUR 33.35. The subscription
price of a share to be subscribed for with the share options will be
lowered by the amount of Stockmann plc dividends paid after the end
of the determination period for the share price, counting from the
record date up to the date of the share subscription. The
subscription price of shares to be subscribed for by exercising the
share options, after the dividend declared by the Board of Directors
for the 2006 financial year, will be EUR 30.95. The subscription
periods for the shares are May 2, 2008-May 31, 2008, May 4, 2009-May
31, 2009 and May 2, 2010-May 31, 2010. As a consequence of the
subscriptions, the company's share capital can be increased by a
maximum of EUR 5 000 000.

The Annual General Meeting also passed the Board of Directors'
proposal on the granting of share options to key employees of the
Stockmann Group. A total of 1 500 000 share options will be granted
to key employees belonging to the senior and middle management of
Stockmann and its subsidiaries and its wholly-owned subsidiary in
disapplication of shareholders' pre-emptive subscription rights. The
disapplication of the subscription right is made because the share
options are part of the Group's incentive and commitment-building
scheme for key employees. Of the share options, 375 000 will bear the
marking 2006A, 375 000 the marking 2006B, 375 000 the marking 2006C,
and 375 000 the marking 2006D. The subscription period for shares
with share option 2006A is March 1, 2008 - March 31, 2010; with share
option 2006B, March 1, 2009 - March 31, 2011; with share option
2006C, March 1, 2010 - March 31, 2012; and with share option 2006D,
March 1, 2011 - March 31, 2013. The subscription period for shares
will not, however, commence with the 2006B and 2006D share options
unless the Group's financial targets criteria as determined
separately by the Board of Directors have been met. Those share
options 2006B and 2006D in respect of which the criteria determined
separately by the Board of Directors have not been met shall lapse in
the manner decided by the Board of Directors. Each share option will
entitle its holder to subscribe for one Stockmann plc Series B share,
whereby a total maximum of 1 500 000 shares can be subscribed for
with the share options. The subscription price for each share through
the exercise of the 2006A and 2006B share options is the
volume-weighted average price of the company's Series B share on the
Helsinki Stock Exchange during the period February 1 - February 28,
2006, plus 10 per cent, or EUR 36.69. The subscription price with the
2006C and 2006D share options is the volume-weighted average price of
the company's Series B share on the Helsinki Stock Exchange during
the period February 1 - February 29, 2008, plus 10 per cent. On the
record date for each dividend payout, the subscription price of the
shares to be subscribed for with share options will be lowered by the
amount of dividends declared after the commencement of the period for
determining the subscription price and prior to the share
subscription. The subscription prices, after the dividend payout
proposed by the Board of Directors for the 2006 financial year, is
EUR 34.29 with option A and EUR 34.29 with option B. The
determination period for the subscription price of share options C
and D has not yet started. As a consequence of the subscriptions, the
company's share capital can be increased by a maximum of EUR 3 000
000.

In accordance with the share option programme for key employees that
was passed as a resolution of the Annual General Meeting, Stockmann's
Board of Directors granted 2006A and 2006B share options to key
employees and to Stockmann's wholly-owned subsidiary. Under the terms
and conditions of the share options, Stockmann's Board of Directors
will decide on the distribution of the C and D share options at a
later date.

Proposal for amending the Articles of Association

According to the new Companies Act, a shareholder whose shares have
not been transferred to the book-entry system does not have the right
to participate in the Annual General Meeting. Accordingly, the Board
of Directors proposes that Article 12 of the Articles of Association
be amended to comply with the new Companies Act.

Personnel strength

The Stockmann Group had an average payroll of 10 069 employees in
2006, or 489 less than in the comparison period (10 558 in 2005 and 9
589 in 2004). The department store in the Jumbo Shopping Centre and
the new Bestseller and Seppälä stores brought an increase in the
number of employees, but the personnel strength was reduced by the
disposals of the Zara business in Russia at the beginning of 2006 and
Stockmann Auto at the beginning of March. The personnel of Zara in
Russia and Stockmann Auto transferred to the new owners' employ under
the terms of their current employment contracts. Stockmann's average
number of employees, converted to full-time staff, decreased by 500
and was 8 037 (8 537 in 2005 and 7 812 in 2004). The Group's total
wages and salaries decreased by EUR 10.4 million from the comparison
period and was EUR 167.9 million (EUR 178.3 million in 2005 and EUR
166.6 million in 2004).

At the end of December 2006, Stockmann had 3 477 employees working
abroad. At the end of December of last year Stockmann had 3 737
people working abroad. The proportion of people working abroad was 32
per cent (32 per cent) of the total personnel.

Corporate social responsibility

Corporate social responsibility is part of the company's normal
long-term operations. The focuses of Stockmann's corporate social
responsibility are our own staff, the environment and far-reaching
integrity in overseas sourcing.

Risk factors

The risk level of the business environment in the Stockmann Group's
areas of operations varies. The level of business risk in the Baltic
countries has diminished significantly after these countries became
members of the European Union, nor do the risks differ in any
material respect from business risks in Finland.

Business risks in Russia are higher than in Finland and the Baltic
countries, and the operating environment is less stable owing to
factors such as the business culture and the undeveloped state of the
country's infrastructure. The pervasiveness of the grey economy,
particularly in the importation of consumer goods, is still large and
plays a part in distorting properly functioning competition. Over the
past years, the operating environment and legislation pertaining to
business activities have nevertheless evolved favourably. The
country's economic growth has been robust thanks to the strong
impetus from export revenues in the energy sector. Stockmann has over
17 years of experience of operating in Russia's continually changing
operating environment. Accordingly, even large changes in the
operating environment in Russia are not estimated to result in a
material increase in the Group's business risk.

The Group's operations are based on flexibly run logistics and
efficient goods flows. Delays and disturbances in flows of goods and
information can have a temporarily adverse effect on operations. The
aim is to manage operational risks connected with these factors by
developing appropriate standby systems and alternative ways of
working as well as by enhancing an undisturbed operation of
information systems. Operational risks are also covered by taking out
insurance policies. Operational risks are not estimated to have a
material impact on Stockmann's business activities.

The Group's revenue and earnings are affected by changes in foreign
exchange rates between the Group's reporting currency, the euro, and
the Russian rouble, the United States dollar as well as certain other
currencies. Financial risks are managed in accordance with the risk
policy confirmed by the Board of Directors, and they are not
estimated to have a material effect on the Group's business
operations.

The Stockmann Group is not involved in major pending litigation.

Outlook for 2007

Retail sales excluding the motor trade are estimated to increase by
about 3 per cent in Finland in 2007. The markets in Russia and the
Baltic countries are set to continue growing faster than the Finnish
market. Stockmann's sales are estimated to come in at about EUR 1.6
billion. Sales from continuing operations are estimated to grow.

Owing to the timing of marketing campaigns and sound inventories,
earnings in the first quarter of 2007 will improve on the previous
year and, correspondingly, earnings in the second quarter will be
lower. Earnings in 2006 included substantial non-recurring items as a
consequence of the disposal of businesses. In 2007, these will be
markedly smaller than in the previous year. The Group has a number of
major investments in progress. The start-up costs of the investments
that will become operational during the year will be a factor
burdening the result for 2007. Because of a decrease in non-recurring
items, the Group's profit before taxes will be lower than in 2006.
The Group's objective is, however, to post improved operating profit
from continuing operations compared with 2006.


Helsinki, February 8, 2007

STOCKMANN plc

Hannu Penttilä
CEO


SUPPLEMENT
Notice of Annual General Meeting


DISTRIBUTION
Helsinki Stock Exchange
Principal media


A press and analyst conference will be held today, February 8, 2007,
at 14.00 at the World Trade Center, Aleksanterinkatu 17, Helsinki.

Conference call today, February 8, 2007 at 16.00 (GMT+2h). Additional
information: www.stockmann.com

The full report including tables can be downloaded from the enclosed
link.


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