By  on January 19, 2012

PARIS — Decreased discretionary spending in most of its markets and unseasonably warm weather affected nonfood categories, including clothing, at French retailer Carrefour SA in the three months ended Dec. 31.

In a conference call with investors Thursday, chief financial officer Pierre-Jean Sivignon said the company may decrease its investments in 2012. “We might have a lower capex in 2012 compared with 2011,” he said.

“We expect the environment to remain challenging in 2012. We will carry on improving pricing throughout Europe and continue our expansion outside Europe,” he added.

The company, the world’s second-largest retailer behind Wal-Mart Stores Inc., confirmed that it expects 2011 operating income at the lower end of its most recent guidance of a decline of between 15 and 20 percent, after issuing several profit warnings over the past year.

The company’s shares fell 2.9 percent in early trading as the market reacted to the news. At market close, Carrefour shares were selling for 17.26 euros, or $22.09, down 1.1 percent.

Carrefour will report its 2011 profits, as well as further details on its plans for 2012, on March 8.

The company has weathered three years of weak results and a string of profit warnings as it tried to turn its ailing hypermarket business around. Carrefour said it would reassess rollout plans for its Carrefour Planet hypermarket concept, which has a greater focus on nonfood than its traditional outlets, and has not performed as well as anticipated.

“We will pragmatically review the rollout plan market by market,” Sivignon commented.

The retailer opened 31 Carrefour Planet units in the fourth quarter, including 14 in France, bringing the total number of stores operating under the banner at yearend to 81.

Carrefour reported a full-year sales increase of 1.1 percent to 91.51 billion euros, or $117.1 billion at current exchange, supported by its activities in emerging markets, notably in South America.

The company’s three-month sales for the period ended Dec. 31 fell 1 percent to 24.15 billion, or $30.89 billion, a decrease Carrefour attributed to a drop in discretionary spending in Europe and China.

Carrefour saw domestic sales down 0.2 percent to 10.47 billion, or $13.39 billion. This included a 2.1 percent decline at its hypermarkets, which represent more than half the retailer’s domestic activity, and where store traffic and average spend both decreased. The company’s supermarket format here saw a 2.1 percent increase in revenues, however.

Carrefour is six months into its 18-month “reset” plan, which aims at turning its ailing domestic business around and better competing with competitors on price, notably by focusing on constant lower prices rather than promotions.

In the rest of Europe, Carrefour saw a 5.3 percent drop in fourth-quarter sales to 7.17 billion euros, or $9.17 billion. In Spain and Italy, revenues were down 4.5 percent and 4.7 percent, respectively, while in Poland and Turkey, they dropped 12.7 percent and 18 percent, and in Greece, 10.5 percent.

In Latin America, three-month sales grew 1.3 percent year-to-year to 4.53 billion euros, or $5.8 billion. Carrefour’s hypermarkets in Brazil, its second largest market, confirmed their turnaround since restructuring began in 2010, Sivignon said.

In Asia, sales were up 6.6 percent to 1.97 billion euros, or $2.52 billion. Although sales on a like-for-like basis in China dipped 6.1 percent due to weaker spending in nonfood, this was more than outweighed by the group’s expansion there, and total sales growth for the quarter on a reported basis was 8.1 percent.

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