Carrefour Q1 Sales Slip 3.7%

The retailer said business was impacted by a combination of a currency effect, a lag in the Easter holiday this year and a drop in petrol prices.

PARIS — Carrefour SA reported sales fell 3.7 percent in the first quarter, due to a combination of currency effects, an unfavorable calendar resulting from the lag in the Easter holiday this year and a drop in petrol prices.

The world’s second-largest retailer behind Wal-Mart Stores Inc. registered sales of 19.79 billion euros, or $27.11 billion at average exchange, in the three months ended March 31.

“Overall, Carrefour posted a solid performance in the first three months, showing sustainable momentum,” the retailer’s chief financial officer, Pierre-Jean Sivignon, told analysts during a conference call Thursday, noting organic sales grew 3.7 percent excluding petrol and calendar effects.

Sivignon declined to comment on a question about Motier, the holding company of the family that owns Groupe Galeries Lafayette, buying a 6.1 percent stake in Carrefour.

Carrefour’s domestic sales in the quarter fell 0.9 percent to 9.23 billion euros, or $12.64 billion. On an organic basis, without petrol or calendar effects, revenues in France rose 1.4 percent.

“France delivered another quarter of solid growth in a competitive environment that remains challenging,” said Sivignon, adding domestic non-food sales were resilient, with an improved performance versus the previous quarter.

Carrefour’s revenues in other European countries declined 2.2 percent to 5.04 billion euros, or $6.91 billion.

“In Spain, we were encouraged by the continued momentum that we saw. Spain posted a second consecutive quarter of positive numbers with like-for-like growth both in food and nonfood,” he continued.

Yet Sivignon noted that the environment in Italy remains difficult, marked by strong promotional activity. The group expects results from its turnaround strategy there to come to fruition in the medium term.

In emerging markets, Carrefour’s sales were down 9.2 percent to 5.52 billion euros, or $7.56 billion.

“In Latin America, we saw accelerated sales growth both in Brazil and Argentina,” said Sivignon, highlighting that organic sales there excluding petrol and calendar effects rose 15.2 percent. However, there was a strong depreciation of the Brazilian real and Argentine peso against the euro, which led to an adverse currency impact. Sivignon said the company will “obviously carefully monitor the currency movements in the two countries.”
Sales in China continued to be impacted by the slowdown in discretionary spending, particularly for nonfood goods, with organic sales growing 2 percent.

“While Carrefour is prioritizing shoring up its European position — a wise move, given it will continue delivering the bulk of sales — long-term ambitions for the BRICs cannot be ignored,” said Gildas Aitamer, a retail analyst at Planet Retail, a global retail data, technology and trend firm. “Although highly capital-intensive, achieving success in Brazil, India and China is a must if the retailer wishes to sustain its position as a ‘global top dog.’”

Sivignon said Carrefour will continue accelerating its multichannel strategy, which includes a revamp of its Web site in France.

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