Carrefour raises cost savings goal as first-half core profits rise

FILE PHOTO: A Carrefour logo is seen on a Carrefour Hypermarket store in Merignac near Bordeaux, France, September 19, 2019. REUTERS/Regis Duvignau/File Photo

PARIS (Reuters) - France's Carrefour CARR.PA on Tuesday raised its goal for cost savings under its strategic overhaul plan as Europe's largest retailer delivered savings of 480 million euros ($563 million) in the first half of 2020.

Carrefour said group operating profits rose 29.1% at constant exchange rates from the same period last year to 718 million euros. This compared with 628 million euros in a Reuters poll of three analysts.

The performance reflected cost cuts, strong second quarter sales in Brazil and Spain, which made up for a more subdued performance in France where sales at large hypermarkets fell 3.6% like-for-like due to the coronavirus lockdown.

“Our first-half performance is very solid: It proves the resilience of our model, its dynamism and its profitability,” Chairman and Chief Executive Alexandre Bompard said in a statement

The company said it was now targeting cost savings of 3.0 billion euros on an annual basis by the end of 2020 against a previous target of 2.8 billion euros

Carrefour is in the midst of a five-year plan it launched in 2018 to cut costs and boost e-commerce investment to boost profits and sales, as it seeks like its peers to tackle competition from online rivals such as Amazon AMZN.O.

It is also expanding into convenience stores to reduce its reliance on big hypermarkets, focusing more on organic products and private-labels, having last year sealed a purchasing alliance with British rival Tesco TSCO.L

Carrefour sticked to its other financial and operational targets under its 2022 strategy plan.

Reporting by Dominique Vidalon; Editing by Edmund Blair