(Adds details throughout on same-store sales, EBITDA, guidance)
By Gram Slattery and Jake Spring
SAO PAULO, Feb 28 (Reuters) - Brazilian food retailer Carrefour Brasil beat profit estimates for the fourth quarter and projected almost 2 billion reais ($617 million) in 2018 capital expenditures as its “cash and carry” wholesale supermarkets continued to lead growth.
The unit of France’s Carrefour SA reported fourth-quarter net income of 596 million reais, up 11.1 percent from a year ago, it said in a securities filing late on Tuesday. The result topped the consensus analyst estimate of 498 million reais compiled by Reuters.
In recent quarters, the retailer has bet on its Atacadao ‘cash-and-carry’ format, which offers a wholesale experience to retail customers. A biting recession in Brazil has forced consumers to aggressively seek discounts.
The strategy, which other food retailers have adopted, has been largely successful, with profit growth at the cash-and-carry stores significantly outpacing the retailer’s other more traditional formats.
Same-store sales, a measure of sales at stores open at least 12 months, rose 2.2 percent in the quarter from the same period last year at the Atacadao formats, but contracted 0.1 percent at the group’s traditional formats.
The results were weaker than in previous quarters, partially due to food deflation in Brazil, which continues to weigh on grocers margins. Sales at traditional formats were also hurt by a higher proportion of electronics sales, which offer lower margins than food, the company said.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 2.8 percent in the quarter from a year ago to 1.118 billion reais.
The result topped the Reuters consensus estimate of 1.019 billion reais, and came despite a 6.2 percent jump in general and administrative expenses.
It projected overall capital expenditures of 1.8 billion reais, and said it will open 20 new cash-and-carry stores this year and continue to emphasize investing in Atacadao.
The company also will focus on growing its e-commerce and digital operations, and said it wanted its Atacadao rewards card to reach break-even by the end of the year. ($1 = 3.24 reais) (Reporting by Gram Slattery and Jake Spring; Editing by Sandra Maler)