Casino Cuts 2019 French Profit Goal As Strikes Weigh On Fourth Quarter
French retailer Casino slashed its forecast for 2019 French operating profit growth due to the impact of transport strikes in the fourth quarter.
In France, where Casino makes 53% of its revenue, sales were flat during the fourth quarter, in an environment marked by social unrest and a decline in consumer confidence in December.
Finance chief, David Lubek said the French transport strikes cost Casino about €80 million in lost revenue in December.
Trading profit from France, excluding real estate activities, was expected to grow 5% in 2019 instead of 10% the retailer previously forecast.
Casino, which also controls Brazil's Grupo Pao de Acucar, said it nevertheless remained on track to deliver €4.5 billion in asset sales by the end of the first quarter 2021.
Overall sales reached €9.228 billion in the fourth quarter, slightly below analyst estimates of around €9.7 billion, while on a same-store basis and excluding fuel and calendar effects, group sales rose 1.6% in the quarter.
Casino has been selling or closing non-profitable stores in France, where a strike against pension reforms now in its 43rd day is weighing on the sales of retailers and hoteliers, with the Paris region the worst hit.
Same-store sales at the Geant hypermarkets arm in France were down 0.7% in the fourth quarter after rising 1.1% in the third quarter.
Casino and electronics retailer Fnac Darty were among the first large French retailers to disclose figures on the financial impact of the strikes.
Fnac Darty said on Thursday the strikes cost it around €70 million in lost revenue. Larger Casino's rival Carrefour reports fourth quarter figures on 23 January.
Leader Price Sale
Casino chief executive and controlling shareholder Jean-Charles Naouri is hunting for ways to ease the company's debts - and those of parent company Rallye which was placed under protection from creditors in May 2019 - via asset sales and refinancing efforts.
Casino, with a current market capitalisation of €4.22 billion and group consolidated net debt of €4.7 billion at the end of June 2019, is engaged in a €4.5 billion disposal plan and is in talks to sell its Leader Price discount chain.
Casino said that as part of the disposal process, Leader Price has been classified as discontinued and is no longer included in the group's consolidated sales in 2019.
Casino aims to bring net debt in France below €1.5 billion by the end of 2020, down from €2.9 billion at the end of June 2019.