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Carrefour Sales Slip 1.3% in Q1

The retailer was hit by continued weakness in Europe and the depreciation of Latin American currencies.

A Carrefour hypermarket.

PARIS — Carrefour SA said on Thursday its sales fell 1.3 percent in the first quarter as its core European markets were battered by economic woes and bad weather, even as currency fluctuations impacted revenues from fast-growing South America.

This story first appeared in the April 19, 2013 issue of WWD.  Subscribe Today.

The world’s second-largest retailer behind Wal-Mart Stores Inc. reported sales of 20.83 billion euros, or $27.52 billion, in the three months ended March 31. All dollar rates are calculated at average exchange for the periods to which they refer.

“Overall, Carrefour demonstrated the resilience and the balance of its business model in the past quarter,” the company’s chief financial officer, Pierre-Jean Sivignon, told analysts during a conference call.

Although Carrefour no longer provides official guidance, Sivignon said market forecasts for 2013 recurring operating income of 2.2 billion euros, or $2.86 billion at current exchange, were “reasonable,” provided currency swings in emerging markets do not take an excessive tool on its revenues.

Sales in France, which accounts for 45 percent of the group’s turnover, totaled 9.28 billion euros, or $12.26 billion, down 0.7 percent versus the same period a year earlier. Revenues were impacted by a negative calendar effect and unseasonably cold weather.

“In our domestic market, all formats performed respectably in a tough trading environment. We were particularly encouraged by continuing growth of food sales, notably at our hypermarkets,” Sivignon said.

Sales in other European countries fell 3.5 percent to 5.46 billion euros, or $7.21 billion, dragged down by austerity-hit Spain and Italy.

In Latin America, revenues were down 0.2 percent to 3.97 billion euros, or $5.24 billion, due to sharp depreciations in the Brazilian real and the Argentine peso. Stripping out currency variations, sales rose 13.9 percent during the period. Asia posted a 0.3 percent rise to 2.12 billion euros, or $2.80 billion.

The executive noted that although consumer spending is under pressure in China, Carrefour is maintaining or growing its market share there and intends to pursue its strategy of opening around 20 stores a year.

He added that sales for the Chinese New Year were in line with expectations and food sales improved slightly in the quarter, although the recent bird flu scare was impacting demand.