* Carrefour Q1 sales 20.8 bln eur vs Rtrs poll avg 20.9 bln
* Carrefour French hyper l-f-l sales down 2.9 pct vs -3 pct
* Casino French hyper l-f-l sales down 11.5 pct vs -10 pct
By Dominique Vidalon
PARIS, April 18 Carrefour, Europe's
biggest retailer, sees little sign of economic improvement in
the austerity-stricken continent after falling demand in Spain
and Italy and weakening trade in its core French market held
back first-quarter sales.
Trends were more positive elsewhere, however, with Brazil,
Carrefour's largest market after France, continuing to show
robust growth, and an improving performance in China.
Analyst forecasts for a rise in full-year operating income
to 2.2 billion euros ($2.87 billion) from 2.14 billion last year
were therefore "reasonable," the retailer said on Thursday.
Consumer groups across Europe are struggling as shoppers'
disposable incomes are squeezed by rising prices, subdued wage
growth and austerity measures.
Smaller domestic peer Casino reported after the
market closed on Thursday a drop in its core French market,
including a worse-than-expected 11.5 percent fall in sales at
its Geant hypermarkets, as it has yet to benefit from recent
Casino, which controls Brazil's top retailer Grupo Pao de
Acucar, however offset French weakness due to robust
growth in Latin America and Asia, and it said it still aimed to
increase sales and operating profit this year.
British grocer Tesco on Wednesday reported slower
UK sales growth since Christmas, while Swiss food group Nestle
and German car parts supplier Bosch both
highlighted weak European markets on Thursday.
"In Q2, we do not expect a significant change in the
economic environment," finance chief Pierre-Jean Sivignon told
analysts, noting "persisting challenging" conditions in Europe.
Carrefour, the world's largest retailer after Wal-Mart
, has been struggling for years in Europe, partly due to
a reliance on hypermarkets, which have been losing out as
time-pressed shoppers buy more goods locally and online and
prefer to buy general merchandise from specialists.
The French group said it made first-quarter sales of 20.8
billion euros, just below the average forecast of 20.9 billion
in a Reuters poll of analysts.
Stripping out fuel and currency effects, revenue rose 0.2
percent, slowing from 0.4 percent in the fourth quarter of 2012.
"Carrefour Q1 results remain weak, lifted once again by
Latin America and especially Brazil, but hampered by Western
Europe, which still represents three-quarters of the retailer's
sales," PlanetRetail analyst Gildas Aitamer said.
"Nonetheless, we believe Carrefour is moving in the right
direction in the economically challenged southern European
markets thanks to an increased discount offering."
Carrefour shares closed down 1.07 percent at 20.40 euros,
underperforming a 0.57 percent decline in the European retail
sector and a 0.07 percent rise in Casino shares.
They trade at 14.4 times estimated 2013 earnings, against
14.9 times for Casino and 11.5 times for Tesco.
The stock is up 63 percent since bottoming out last July,
and up 7 percent this year, a boost for top stakeholder Blue
Capital, controlled by LVMH head Bernard Arnault, and
U.S. investment fund Colony Capital.
WEAK FRENCH HYPERMARKETS
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.
Under his recovery plan, Georges Plassat, who became
Carrefour CEO in May 2012, has vowed to cut costs, improve price
competitiveness and simplify product offerings, notably in the
troubled non-food sector, and last month unveiled plans to boost
There were few signs of improvement in France, however,
where revenue eased 1.4 percent after a 0.8 percent decline in
the fourth quarter, also hit by a negative calendar effect and
Closely watched same-store sales at Carrefour's French
hypermarkets fell 2.9 percent after a 2 percent decline in the
fourth quarter. That was in line with market expectations.
Sivignon flagged a good performance in food sales at French
hypermarkets, adding Carrefour was seeing a "progressive"
improvement in price perception against its rivals and a "steady
improvement" in the store traffic trend.
In emerging markets, Brazil remained a bright spot, showing
double-digit like-for-like sales growth, with both food and
non-food showing improvements in hypermarkets.
In China, sales related to the Chinese New Year were in line
with Carrefour's expectations and the trend in food sales
slightly improved in the quarter, Sivignon said, until a recent
health scare in the past month over bird flu.