UPDATE 1-Carrefour says French recovery gains momentum

Thu Oct 17, 2013 2:15am EDT

* Q3 sales 21.111 bln eur, up 3.1 pct like-for-like excl fuel

* French hypermarket sales up 3 pct vs -1.1 pct in Q2

* China sales growing for second consecutive quarter

* CFO says 2013 EBIT consensus of 2.19 bln eur "reasonable" (Adds CFO comments, details)

By Dominique Vidalon

PARIS, Oct 17 (Reuters) - Carrefour said French hypermarket sales returned to growth in the third quarter while China also improved, further reassuring investors about Chief Executive Georges Plassat's ability to revive the world's second-largest retailer.

Growth in Brazil, Carrefour's largest market after France, was robust in the quarter while austerity-hit Spain also confirmed the resilience seen in the previous quarter, Carrefour said on Thursday.

Chief Financial Officer Pierre-Jean Sivignon told reporters the market consensus for 2013 earnings before interest and taxes of around 2.19 billion euros ($2.95 billion) was "reasonable", provided Latin American currencies did not weaken versus the euro.

"Carrefour is showing solid growth in its domestic market as well as abroad," Sivignon said.

The world's largest retailer after Wal-Mart said third-quarter sales were 21.11 billion euros, for like-for-like growth of 3.1 percent, excluding fuel.

Closely watched same-store sales at Carrefour's French hypermarkets rose 3.0 percent, reversing a 1.1 percent decline in the second quarter and a 2.9 percent drop in the first.

Analysts had eyed a rise of between 1.5 percent and 2.7 percent in the quarter in French hypermarket sales.

"Our price image and store traffic continues to improve," Sivignon said, adding that all store formats in France had achieved positive growth in the quarter.

France, which contributes more than 40 percent of group sales, is key for investors to assess whether Carrefour can finally come to grips with its problems in Europe.

Carrefour has struggled for years in the region, partly due to a reliance on the hypermarket format it pioneered as time-pressed customers shop more locally and online, and buy non-food goods from specialists.

Plassat, who joined in May 2012, has responded in France by cutting costs, revamping stores, improving price competitiveness, simplifying product offerings and giving more autonomy to store managers.

Emerging markets were another bright spot, with like-for-like sales in China growing for the second consecutive quarter, up 1.1 percent after a 0.4 percent rise in the second quarter.

Brazil achieved like-for-like growth of 8.8 percent against 7.1 percent in the second quarter. ($1 = 0.7412 euros) (Editing by James Regan)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video