Domestic and Latin America sales boost Carrefour in first quarter

Carrefour, the French supermarket group, said that like-for-like sales rose 2.3 per cent in the first quarter compared with a year earlier thanks to a stronger performance in France and robust growth in Latin America.

The world's second-largest retailer by revenue said that sales during the first three months of 2105 reached €21bn, due to a notable improvement in its domestic market, which accounts for about half the total. The figure was slightly above market expectations.

Like-for-like sales in France, excluding calendar effects and petrol, climbed 2.5 per cent compared with a year earlier - against just 1.2 per cent during the last quarter of 2014 and a fall of 0.2 per cent in the third quarter of last year.

Particularly encouraging was the performance at the group's hypermarkets, where like-for-like sales to the end of March grew 2.1 per cent, following negative growth during the previous two quarters. Hypermarkets account for roughly a quarter of total group sales.

Carrefour's sales in other European countries grew 0.9 per cent during the period on a like-for-like basis. Pradeep Pratti, of Citi Research, said in a note on Friday: "Over a six quarter period, France, Spain and Belgium now have all on average posted positive like-for-like sales growth and the numbers today point to an increasingly robust trading picture."

Internationally, the group said that like-for-like sales during the first quarter, excluding calendar effects and petrol, grew 2.2 per cent. Latin America grew 12.5 per cent during the period, with like-for-like growth of 8.4 per cent in Brazil.

Latin America sales compensated for a weak quarter in Asia as like-for-like sales fell 11.3 per cent. In China, the group said that it had started an action plan to address a 13 per cent fall in sales in the three months to the end of March.

Abilio Diniz, the Brazilian billionaire, on Thursday announced that he had more than doubled his stake in Carrefour to just over 5 per cent, making his family's Peninsula holding company the fourth-largest shareholder.

The better figures come as Georges Plassat, chairman and chief executive, is coming to the end of a three-year back-to-basics plan at the retailer, which has seen the group exit several non-core emerging markets and refocus on France.

Carrefour said it would increase capital expenditure this year to up to €2.6bn as it continues to revamp stores, particularly across France.

Last month, Carrefour said it slightly beat its recurring operating profit target, held since March last year, reporting a figure of €2.39bn in 2014, partly crediting its 'back to basics' strategy.

The group had maintained that goal since March last year - and reiterated it last month - even against a backdrop of exchange-rate fluctuations.

Carrefour said that the trading environment there "continued to be marked by frugal consumption".

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation