Retailer Carrefour Q4 sales growth slows as France lags

PARIS (Reuters) - Carrefour, the world’s second-largest retailer, said sales growth slowed in the fourth quarter, reflecting a weaker performance in its core French market where hypermarket stores suffered in a persistently difficult environment.

The logo of food retailer Carrefour is on display in Tbilisi, Georgia, July 13, 2016. REUTERS/David Mdzinarishvili/File Photo

In Brazil, the group’s second-largest market after France, business was resilient despite a slowing economy, while sales elsewhere in Europe, notably Spain, posted solid growth.

In China, where Carrefour is restructuring its operations, the rate of decline in sales slowed to 5.4 percent from 7.8 percent in the third quarter.

Carrefour finance chief Pierre-Jean Sivignon said 2016 recurring operating income would be “very close” to median expectations of 2.39 billion euros, implying a 2.2 percent decline from 2.445 billion euros in 2015.

Europe’s largest retailer also hoped to launch initial public offerings for its commercial property unit Carmila and its Brazilian business this year, he said.

Carrefour said fourth quarter sales reached 23.366 billion euros ($24.85 billion), above the median of analysts estimates of 23.22 billion in a Thomson Reuters poll.

Stripping out fuel, currency and calendar effects, revenue grew 2.9 percent year-on-year, a slowdown from 3.2 percent growth in the third quarter.

Despite the quarterly slowdown, Carrefour achieved its fifth straight year of rising sales for 2016 as a whole, as a recovery plan started by Chief Executive Georges Plassat in 2012 continues to bear fruit.

Carrefour, which makes 73 percent of its sales in Europe, is pursuing a recovery strategy focusing on price and cost cuts along with expansion into smaller convenience stores, while also renovating its chain of hypermarkets.

“In 2017 Carrefour will continue to strengthen all its (growth) boosters to pursue profitable growth,” Sivignon said.

In France, where Carrefour makes 43 percent of its sales, like-for-like revenue rose 0.7 percent in the quarter, a slowdown from 1.2 percent growth in the third quarter amid fierce price competition among retailers.

Closely watched same-store sales at Carrefour’s French hypermarkets fell 1.2 percent after a 1.0 percent decline in the third quarter but supermarkets and convenience stores had a robust performance.

Carrefour’s performance in France still outpaced that of smaller rival Casino <CASP.PA, which reported a 0.2 percent rise in same-store sales in the fourth quarter.

Reporting by Dominique Vidalon Editing by Sudip Kar-Gupta and Andrew Callus