Carrefour Posts Sharp Fall in Net Profit
July 28 2016 - 5:50AM
Dow Jones News
PARIS—Carrefour SA said Thursday its profit fell in the first
half, hit by unfavorable exchange rates and difficult conditions in
the grocer's home market of France.
Carrefour, which vies with Tesco PLC for the title of the
world's second-largest retailer after U.S.-based Wal-Mart Stores
Inc., said net profit fell 59% from a year earlier to €129 million
($143 million) as it battled bad weather and repeated labor strikes
in France.
First-half recurring operating profit rose 5.3% to €706 million
at constant exchange rates, beating analyst expectations of €685
million. Sales for the quarter ended June 30 fell 4.1% to €20.5
billion, hit by currency effects.
Carrefour described sales as "resilient" in France and Europe
given the "more difficult consumption environment."
Having returned the company to growth, Carrefour Chief Executive
Georges Plassat is now restructuring the retailer's operations in
China and working to increase nonfood sales in Europe. He is also
seeking to reduce Carrefour's reliance on large hypermarkets—which
account for roughly 50% of the company's sales—in favor of smaller
convenience stores.
The company, with some 12,000 stores in more than 30 countries,
said the transformation of its model in China is well advanced and
sales in Brazil—which is in the midst of a prolonged economic
recession—stayed strong.
Comparable sales growth slowed to 2.6% in the second quarter,
excluding petrol.
Carrefour shares were up 1% in Thursday morning trading.
In France, Carrefour continued to integrate the unprofitable DIA
stores that it bought last year, adding that the conversion of the
648 stores to Carrefour banners would be completed by the end of
the year.
It maintained its 2016 financial targets, including a higher
free cash flow and investments of between €2.5 billion and €2.6
billion.
Ian Walker in London contributed to this article.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
July 28, 2016 05:35 ET (09:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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