* Second quarter sales in line with forecasts
* Like-for-like sales down 1.1 pct vs 2.9 pct drop in first
* Market conditions for 2013 EBIT of 2.2 bln euros
"reasonable" - CFO
* Shares up 2.4 pct, outperform retail sector up 0.7 pct
(Adds CFO comments, analysts, share reaction)
By Dominique Vidalon
PARIS, July 18 Carrefour said business
was improving at its core French hypermarkets and sales turned
positive in China for the first time since 2011, further
reassuring investors about boss Georges Plassat's ability to
revive Europe's largest retailer.
Growth in Brazil, Carrefour's largest market after France,
slowed in the quarter and trading conditions remained tough in
austerity-hit Western Europe, especially Italy.
Chief Financial Officer Pierre-Jean Sivignon told reporters
the market consensus for 2013 earnings before interest and taxes
of around 2.2 billion euros ($2.88 billion) was "reasonable",
provided exchange rates in Latin American currencies did not
worsen versus the euro.
"France is on the right track with continued encouraging
signs in hypermarkets while the situation remains very
challenging in Southern Europe and emerging markets continue to
deliver good growth," Sivignon later told analysts.
Emerging markets were a bright spot, with like-for-like
sales in China up 0.4 percent, after declining 2.3 percent in
the first quarter, a performance CM-CIC Securities analysts said
in a note was an "excellent surprise".
Carrefour said it planned a steady expansion in China -
which accounted for six percent of revenue in 2012 - targeting
20 store openings a year. It expects to be present in 100
Chinese cities within three years against 70 now.
Results in Brazil remained positive, though like-for-like
sales growth slowed to 7.1 percent from 10.6 percent in the
first quarter, a situation Sivignon tied in part to the
unfavourable timing of Easter.
By 1042 GMT, Carrefour shares had gained 2.42 percent. Its
stock is up 15 percent this year, outperforming a 3 percent rise
in its European sector.
The stock trades at 14.7 times 12-month forward earnings
against 13.36 times for Casino and 10.85 times for
Tesco, a premium analysts have tied to hopes Carrefour
will deliver on its turnaround effort.
Carrefour has struggled for years in Europe, partly due to a
reliance on hypermarkets as time-pressed customers shop more
locally and online and buy general goods from specialists.
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, Plassat, who became Carrefour chief
executive in May 2012, has vowed to cut costs, improve price
competitiveness and simplify product offerings, notably in the
troubled non-food sector, and boost capital expenditure to
renovate ageing stores.
The world's largest retailer after Wal-Mart by sales
said second-quarter sales were 20.46 billion euros, near the
average 20.47 billion forecast in a Reuters poll of six
Stripping out fuel and currency effects, revenue was flat
after a 0.2 percent rise in the first quarter of 2013.
"Overall we felt the message from the company is positive
and core French operations seem to be moving the right way,"
said Citi analyst Alastair Johnston
The decline in same-store sales at Carrefour's French
hypermarkets slowed to 1.1 percent in the second quarter from
2.9 percent in the first, beating average market expectations of
a 1.8 percent drop.
"It's too early to call it a trend but we are seeing
encouraging signs of increasing traffic at French hypermarkets,
In Spain, the situation was slowly improving but it had
worsened in Italy amid slumping food consumption, with
like-for-like sales down 9.9 percent after a 6.5 percent fall in
the first quarter.
($1 = 0.7637 euros)
(Editing by James Regan and Jon Boyle)