FRANCE: Carrefour shares sink after FY forecast cut | Progresiv

Carrefour has trimmed its sales forecast for the full year, after reporting a sharp drop in profits for its fiscal first-half.  The news has sent shares in the group plunging this morning – they were down around 15% as of noon CET.

For the half, net sales grew by 6.2% to 38.5 billion euros, although they grew by just 2.6% on an organic basis.  Meanwhile, adjusted net profit dropped by 34% to 154 million euros, while underlying operating profit was down 12.1% to 621 million euros (constant-currency basis).

Carrefour said its profits were partly impacted due to costs and charges related to its ongoing restructuring in various markets.  It also cited the impact of continued losses in Argentina, as well increased promotional activity in France.

Sales in France rose by 0.1% to 19.3 billion euros on an organic basis (excl. fuel, calendar-adjusted), on like-for-like growth of 1.3%. The group’s hypermarkets recorded a 1% drop in sales on an underlying basis (-0.5% LFL), which was offset by a 3.9% rise at its convenience & other formats (+5.6% LFL).

Sales across Europe rose by 2.8% to 11.2 billion euros on an underlying basis (+2.2% LFL), helped by an improved performance in Spain (+2% sales), Italy (+2.6%), and Belgium (+0.1%).  The strongest growth came in Latin America, where underlying sales rose by 11.3% to 9.1 billion euros (+7.3% LFL).  However, sales in Asia continued to remain weak, with underlying sales declining by 2.9% to 3.5 billion euros (-4.3% LFL).

Carrefour added that the second-half “operating environment that will remain difficult in some countries.”  As a result, the group lowered its full-year sales forecast to growth of 2%-4% (constant-currency basis), down from a previous forecast of 3%-5%. (www.kamcity.com)