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German retailer Metro cuts outlook for Media-Saturn unit

BERLIN/DUESSELDORF, May 8 (Reuters) - German retailer Metro AG cut its outlook on Thursday for its consumer electronics division after a disappointing first three months of the year as the unit struggled with competition from online rivals and a leadership crisis.

The chief executive of Media-Saturn, Europe's largest consumer electronics chain which accounts for about a third of Metro's sales, quit on Tuesday amid a dispute between the firm's founder, Eric Kellerhals, and majority shareholder Metro.

Metro reported Media-Saturn sales fell 3.1 percent in its fiscal second quarter to 6.86 billion euros ($9.55 billion), saying it had been unable to match performance in the previous quarter due to the "consistently challenging market environment.

Metro cut its 2013/14 outlook for the business, saying it now expected earnings before interest and tax (EBIT) before special items to approximately match the prior year's level, compared to a previous forecast for "sharply rising" earnings.

However, it said the Metro group remained on course to meet its sales and earnings guidance for 2013/14 as other units should be able to compensate for Media-Saturn. ($1 = 0.7183 Euros) (Reporting by Emma Thomasson; editing by Thomas Atkins)