Carrefour delivers
Its French business improves as Q4 sales increase
PARIS: Carrefour SA, France’s biggest retailer, said fourth-quarter sales rose 0.8% because of growth in Latin America while business improved in France.
Revenue increased to 22.9 billion euros (US$30.5bil), the BoulogneBillancourt, France-based grocer said yesterday in a statement. The average of three analysts’ estimates compiled by Bloomberg was 23 billion euros. French sales rose 0.6%.
Chief executive officer Georges Plassat is wrestling with weak consumer spending in France and other European countries as he seeks to revive sales. Competitor Casino Guichard-Perrachon SA said on Tuesday that household consumption was “soft” in the fourth quarter in France, where the company reported declining revenue in the period.
“Despite the market fears, Carrefour delivered a good performance in France,” John Kershaw, an analyst at BNP Paribas in London, said yesterday in a report to clients, citing better-than-expected hypermarket sales.
Plassat’s strategy “to improve price perception and simplify the offer clearly is getting traction and, we think, full-year French profits could also be better than expected.”
Carrefour jumped as much as 4.8% to 20.24 euros and was trading up 3.8% at 9.01 am in Paris. The stock has risen 18% in the past 12 months.
“The group is comfortable with the current median consensus” for recurring operating income of 2.07 billion euros, Carrefour said.
Sales at stores opened a year or more climbed 0.4%, excluding currency swings and gasoline, the company said.
Same-store revenue on that basis at French outlets fell 0.8%, versus a 1.5%t decline in the three months through September. The decline at French hypermarkets slowed to 2% in the fourth quarter from 3.3% in the third, and the company said food sales at the format rose for the first time in more than two years.
“Consumption in southern Europe remains under pressure,” Carrefour said.
Business in France benefited from Carrefour’s low-price guarantee on gasoline, which boosted sales 1.5%, the grocer said.
In the rest of Europe, same-store sales fell 3.9%, excluding currency movements and gasoline, led by declines in Italy and Spain. Government austerity measures continued to affect consumption in Spain, while Italy was affected by a more intense competitive and promotional environment, Carrefour said. Belgian sales grew 3.3% on the same basis.
In Latin America, same-store sales excluding exchange rates and gasoline climbed 11%, led by growth in Argentina.
Expansion was driven by Eki stores, which Carrefour acquired in June 2012. In Brazil, all formats contributed to growth. Revenue on that basis in Asia fell 3.9%, declining 3.1% in China and 7% in Taiwan and India, Carrefour said. – Bloomberg