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Jul 6, 2017
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Carrefour second-quarter sales growth accelerates as France improves

Reuters API
Jul 6, 2017

Carrefour reported an improved second quarter performance on Thursday, in a further sign the turnaround strategy of outgoing boss Georges Plassat had helped revive the world's second-largest retailer.

Closely-watched French hypermarket sales returned to positive territory for the first time since the third quarter 2015, while the rest of Europe, notably Italy and Spain had robust sales, and Carrefour kept its 2017 sales growth outlook.

Chief Financial Officer Pierre-Jean Sivignon told analysts Carrefour still eyed 3-5 percent sales growth at constant exchange rates for full-year 2017.

He said he would comment on the consensus of analysts for the group's 2017 operating profit only on Aug. 30, when the French retailer announces its first-half results.

The consensus currently stands at 2.49 billion euros.

Second-quarter group sales reached 21.759 billion euros ($24.82 billion), above the average of analysts' estimates of 21.5 billion euros.

Stripping out fuel, currency and calendar effects, revenue grew 2.8 percent year-on-year, an acceleration from 1.4 percent growth in the first quarter.

Alexandre Bompard, the former boss of French retailer Fnac Darty, is taking the top seat at Carrefour on July 18, replacing Plassat who has been at the helm since 2012.

Investors want Carrefour's new CEO to boost the performance of the French hypermarkets, a task in which others have struggled or failed, and to catch up in the digitalization of retail, notably after Amazon's $13.7 billion bid to buy Whole Foods Market sent shockwaves across global food retailers.

Since taking the reins in June 2012, Plassat has led a recovery focused on price cuts, accelerating expansion into convenience shops and renovating stores.

Under Plassat Carrefour has made progress in most of Europe and in Brazil but it suffered a drop in group profit last year, pulled down by a tough French market, where its hypermarkets face competition from online rivals and aggressive price discounting from those such as unlisted Leclerc.

In France, where Carrefour makes 47 percent of its sales, like-for-like revenue rose 1.9 percent in the quarter, an acceleration from 0.5 percent growth in the first quarter.

Sales at French hypermarkets alone rose 0.5 percent after a 1.6 percent decline in the first quarter while supermarkets and convenience stores also had a good performance.

Sivignon said the performance of the French hypermarkets was in a challenging environment, adding it reflected price cuts and warm weather conditions in June.

Because Carrefour plans to list its Brazil business on July 20, it is not allowed to disclose figures for Brazil, its second-largest market after France.

The group is reporting all emerging markets "as rest of the world" with no details given by country.. That segment had like-for-like sales growth of 3.4 percent in the second quarter against 3.1 percent in the first.

In a separate statement Carmila, Carrefour's property unit, said it raised 578 million euros in a capital increase that will give it more financial muscle to fund its development.

($= 0.8768 euros)

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