Carrefour, the world's second-largest retailer, has reported a strong improvement in profitability at its core French business, as its much-vaunted turnaround plan started to pay dividends.
First-half recurring operating profit rose 4.9% to €766 million ($1 billion), including a 75.4% jump in operating profit in France, where the group makes more than 40% of its sales, with Chief financial officer Pierre-Jean Sivignon commenting, "Our French business continues to show encouraging signs."
The stronger performance in France compensated for weakness in other regions, particularly the rest of Europe, where earnings fell by 76% and sales fell 4.6% to €9.18 billion (US$12.10 billion). Operating profit dropped by 13% in Asia and 6% in Latin America, where growth was wiped out by the weakness of local currencies against the euro.
In France, the retailer's focus is to be on improvement of the offering and price perception, continued store refurbishments and roll-out of the Drive format and multi-channel development.
Priorities for the rest of the year include development of the multi-local, multi-format mode; decentralization and empowerment and continued strict financial discipline as it seeks to regain shoppers in an economic climate which the retailer does not expect to improve in 2013.
Carrefour expects earnings for the year to be in line with analyst estimates of €2.185 billion, Sivignon said.
According to the retailer, "Amid toughening consumption trends worldwide and exchange rate volatility, Carrefour is staying the course. The priorities announced at the annual results presentation in March are reaffirmed."
© 2013 - ESM: European Supermarket Magazine by Ellen Lunney
