Paris - Carrefour SA, France’s largest retailer, indicated profit may rise as much as 6.7 percent this year after reporting first-quarter sales that came in just above predictions.
Analysts’ expectations of full-year recurring operating income of 2.53 billion euros ($2.7 billion) to 2.55 billion euros are “reasonable”, Chief Financial Officer Pierre-Jean Sivignon said on Friday on a call with reporters. Earnings on that basis totalled 2.39 billion euros in 2014.
First-quarter revenue increased 6.2 percent to 21 billion euros, Boulogne-Billancourt, France-based Carrefour said in a statement, as growth at home and in Brazil compensated for weakness in China. Analysts were predicting sales of 20.8 billion euros, according to estimates compiled by Bloomberg.
Carrefour is ramping up investment this year to continue a turnaround under Chief Executive Officer Georges Plassat, who is slated to return to office this month after surgery in early February. The company has earmarked as much as 2.6 billion euros for projects including modernising stores, adding pick-up points for online orders in France and opening three of five logistics centres planned in China by 2016.
The key formats in France remain “in positive territories, excluding petrol, while Italy and China remain the retailer’s pain points”, Gildas Aitamer, an analyst at Planet Retail, said before Carrefour reported the figures. “Brazil will continue to drive the group’s growth.”
French gains
Even with a competitive environment in France, Carrefour boosted traffic in the quarter at all the types of stores it operates, Sivignon said. French hypermarket sales climbed 2.1 percent at outlets open at least a year at constant currencies, excluding fuel and calendar effects, beating estimates.
In Brazil, where sales on a that basis climbed 8.4 percent, conditions for Carrefour’s local unit to sell shares in an initial public offering “aren’t there yet”, Sivignon said. Still, the retailer will be technically ready to conduct an IPO there by the end of the second quarter, he said.
Like-for-like revenue, excluding calendar effects and car-fuel sales, fell 14 percent in China, 4 percentage points more than analysts predicted. The market continues to be marked by frugal consumption, Carrefour said.
Brazilian billionaire Abilio Diniz raised his family’s stake in Carrefour to 5.07 percent, his holding company said on Thursday. Peninsula is now the fourth-largest shareholder in the French retailer.
Bloomberg