Carrefour quarterly sales figures miss estimates
Updated: 2012-01-20 07:28
Sales at Carrefour SA stores slid across Europe and Asia during the fourth quarter. [Nelson Ching / Bloomberg]
PARIS - Carrefour SA, the world's second-largest retailer, said last year's profit was at the lower end of its reduced forecast range after fourth-quarter sales declined.
The French company fine-tuned its prediction for a drop of 15 to 20 percent in so-called current operating income, after twice cutting the forecast in the second half.
The economic slowdown "further impacted discretionary spending" in the fourth quarter, Chairman and Chief Executive Officer Lars Olofsson said on Thursday in a statement. Revenue fell 1 percent to 24.2 billion euros ($31.3 billion).
Europe's sovereign-debt crisis has hurt consumer spending in Carrefour's domestic market, where the French-based company is cutting prices and overhauling stores. Sales also slid across Europe and Asia during the quarter, leaving Latin America as the retailer's sole bright spot.
"There is no improvement to be expected in the coming months," Arnaud Joly, an analyst at CA Cheuvreux, wrote in a report this month. "The measures taken to turn around France will take time, and non-food is likely to remain very depressed all across Europe." Joly has an "underperform" recommendation on Carrefour stock.
Fourth-quarter sales at stores open a year or more fell 1.9 percent, excluding currency moves and gasoline, Carrefour said.
The retailer converted 31 hypermarkets to its new format in the quarter, taking to 81 the number of Carrefour Planet stores last year. The rollout for 2012 will be "pragmatically reviewed country by country", Carrefour said.
Fourth-quarter sales at Carrefour stores open at least a year fell 2.8 percent in France and decreased 4.8 percent in the rest of Europe, excluding gasoline, the company said. French hypermarket sales on that basis fell 4.7 percent. Like-for-like food sales at French hypermarkets declined 3.6 percent, while non-food sales decreased 7.2 percent.
Carrefour attributed the drop in fourth-quarter hypermarket sales to weaker discretionary spending and the initial effects of lower prices and more targeted promotions. The retailer said it will accelerate the introduction of its so-called click-and-collect drive format at its hypermarkets and supermarkets.
Same-store supermarket sales decreased 0.8 percent, excluding gasoline, while convenience stores and other activities rose 3.3 percent on the same basis. About one-third of the convenience network was under the Carrefour banner at the end of December, the company said.