French supermarket retailer Carrefour said revenue growth accelerated in the fourth quarter driven by strong sales in Brazil, but transport strikes dampened business at its hypermarkets in France.
Europe's largest retailer is in the middle of a five-year plan it launched in 2018 to cut costs and boost e-commerce investment in a bid to lift profits and revenues and help it tackle competition from Amazon. In its results release on Thursday it kept all its targets under the plan.
For the full year that ended in December 2019 it said it expected recurring operating profit to reach 2.1 billion euros, an increase of 145 million at constant exchange rates. The company, which has a purchasing alliance with Britain's Tesco, is due to report its full earnings on 27 Feb.
"The year 2019 marks an important milestone for our group. Carrefour posted solid and profitable growth. Our transformation plan is bearing fruit," Chairman and CEO Alexandre Bompard said in a statement.
Sales Performance
Fourth-quarter sales came to 21.74 billion euros, broadly in line with expectations.
Sales growth reached 3.1% on a like-for-like basis, excluding fuel and calendar effects, against 2.3% in the previous quarter.
In Brazil, same-store sales rose 7.6% in the fourth quarter.
However, in France where Bompard has made reviving flagging sales at large hypermarkets a priority, sales were down 0.9%, after falling by a similar 0.9% in the third quarter.
Hypermarket sales were down 3.4% in the last three months of the year after falling 3.6% in the third quarter, offsetting positive growth in supermarkets and convenience stores.
Turnaround Plan
Carrefour's turnaround plan also includes fewer sales promotions in France to focus on everyday low prices and scaling back of non-food items, which already weighed on hypermarket sales in the third quarter.
In the fourth quarter hypermarket sales were also hit by transport strikes in France against pension reforms.
Last week, smaller French rival Casino slashed its forecast for 2019 French operating profit growth after transport strikes shaved some 80 million euros off revenue in the fourth quarter.
Carrefour, however, said that for the whole of last year it expected recurring operating profit for France alone would grow at a double-digit rate.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
