French retail giant Carrefour plans to buy back up to €500 million in shares this year, with the business showing confidence in the success of its turnaround plan following a strong first quarter.
Carrefour, which last month agreed to buy Brazil's third-biggest food retailer Grupo BIG for about $1.3 billion, has also maintained its financial and operational targets under its 'Carrefour 2022' strategic plan.
"Our confidence in the success of our transformation plan, as well as in our ability to generate high cash flow, is further strengthened," Alexandre Bompard, Carrefour chairman and chief executive said in a statement.
"In line with our capital allocation policy, we are seizing the opportunity offered by current market conditions to announce a share buyback."
The buyback will be Carrefour's first in more than a decade.
First quarter sales reached €18.56 billion, marking like-for-like growth of 4.2% and reflecting robust food sales in the key markets of Brazil, France and Spain.
In France alone, sales growth reached 3.5% in the first quarter, with Carrefour outperforming in each of its channels: hypermarkets, supermarkets, convenience and the Drive channel.
That performance reflects the success of a method that puts customer satisfaction and in-store execution at the heart of all commercial initiatives, the group said.
"Carrefour is showing sustained commercial momentum and posted a quarter of growth that is all the more remarkable given that it compares with the exceptional period of March 2020, marked by the outbreak of the sanitary crisis," said Bompard.
"Our growth model, based on operational excellence, competitiveness and the power of our omnichannel offer, translates into market share gains in our main countries."
By early April, with new lockdown measures in place in France, growth remained solid, including in hypermarkets.
Carrefour and food retailers worldwide have benefited from demand generated as lockdowns over COVID-19 forced consumers to stay at home.
The plan aims to boost profits and revenues, and fend off competition from Amazon.