January 17, 2013 / 7:16 AM / 5 years ago

UPDATE 2-Carrefour turnaround hopes lifted by French improvement

* Q4 sales 22.85 bln euros vs I/B/E/S poll 22.9 bln

* Q4 l-f-l French hypermarkets down 2 pct vs 3.3 pct in Q3

* France improves, Southern Europe still difficult

* Comfortable with 2012 profit estimate of 2.07 bln euros

* Shares up over 6 percent (Adds detail on European peers, analyst, share prices)

By Dominique Vidalon

PARIS, Jan 17 (Reuters) - Price cuts and revamped product ranges helped Carrefour deliver an improved fourth-quarter performance in its core French market, reassuring investors about new boss Georges Plassat’s ability to revive Europe’s largest retailer.

The French group is battling to reverse years of underperformance in Europe, where its hypermarkets have been hit by competition from specialist stores and trends toward local and online shopping.

Carrefour said on Thursday sales in China also improved, while Brazil, its biggest market after France, saw robust growth. But sales in austerity-hit Southern Europe remained under pressure.

The world’s second-biggest retailer after U.S. group Wal-mart said it was comfortable with analysts’ current median forecast for 2012 recurring operating income, which stands at around 2.07 billion euros ($2.75 billion).

Its shares were up 6.2 percent at 20.52 euros by 0845 GMT.

“Another reassuring quarter with Q4 (fourth-quarter) sales showing some signs of progress,” said one retail analyst, who declined to be named.

Carrefour, which makes over 40 percent of its sales in France, said it made group sales of 22.85 billion euros in the last quarter of 2012, in line with the average 22.9 billion forecast in a Thomson Reuters I/B/E/S poll.

Stripping out fuel and currency effects, revenue in France fell 0.8 percent after a 1.5 percent drop in the third quarter.

Same-store sales at French hypermarkets fell 2.0 percent after a 3.3 percent decline in the third quarter and a 5.7 percent drop in the second.

This reflected the impact of promotions in October as well as initiatives such as offering shoppers lasting price cuts, introduced last year and strengthened by CEO Plassat.

Carrefour has also been revamping its cheaper own-brand ranges and cutting back on non-food goods, where it has faced the strongest competition from specialist and online rivals.

The group’s performance in France came in marked contrast with that of smaller domestic rival Casino, which posted a near 10 percent drop in hypermarket sales on Tuesday after it funded permanent price cuts on basic products by reducing promotions.

It has been a fiercely competitive festive season for retailers across Europe, with shoppers’ disposable incomes are squeezed by higher prices, subdued wages growth and austerity measures.


Dutch retailer Ahold and Belgian peer Delhaize , which both make most sales in the United States, reported sales broadly in line with expectations on Thursday.

Ahold, whose Giant and Stop & Shop grocery stores are mostly in the U.S. northeast, benefited from customers stocking up ahead of Hurricane Sandy, but suffered a slowdown in sales in the Netherlands as its vitamin-to-cosmetics chain Etos faced stiff competition.

Delhaize, with a larger presence in the economically weaker U.S. southeast, stemmed four quarters of declining sales there after a revamp of its main Food Lion chain, involving price cuts and more fresh fruit on offer.

The company said it was Food Lion’s best quarterly performance since 2006.

However, the Belgian group also said it would be taking a 390 million euro ($399 million) one-off hit related to a revaluation of Maxi, the Balkan chain bought in 2011, the closure of 34 U.S. Sweetbay stores and U.S. management layoffs.

Shares in Ahold slipped 0.6 percent to 10.44 euros, while Delhaize stock was up 5.5 percent at 33.71 euros.

$1 = 0.7521 euros Additional reporting by Robert-Jan Bartunek and Philip Blenkinsop in Brussels; Editing by James Regan and Mark Potter

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