PARIS — Carrefour SA said on Thursday its sales fell 1.3 percent in the third quarter, despite the resilience of its key domestic market, as sales in the rest of Europe remained sluggish and negative currency effects impacted its results in Latin America.
The world’s second-largest retailer behind Wal-Mart Stores Inc. reported sales of 21.11 billion euros, or $27.96 billion, in the three months ended Sept. 30. All dollar rates are calculated at average exchange rates for the period concerned.
“Overall, we are encouraged by the solid performance recorded in the quarter in both our domestic markets as well as in our growth markets,” the company’s chief financial officer Pierre-Jean Sivignon told analysts during a conference call.
“This is further proof of the resilience and the balance of Carrefour’s business model across its formats. It’s also proof that the action plans that we are implementing are starting to deliver results,” he added.
“However, we remain cautious as we head into the important fourth quarter given the uncertainty and volatility of the macroeconomic environment. In this context, Carrefour will continue to focus on its key priorities,” Sivignon said.
As part of a broad-ranging reorganization since the arrival of chief executive officer Georges Plassat in May 2012, Carrefour has sold off non-core interests to focus on markets where it has a leadership position.
It has also decentralized management to give more responsibility to regions and stores. Last month, the retailer announced Sivignon would take on the additional duties of overseeing the group’s branches in Spain and Italy, effective Oct. 1, in the framework of a regional reshuffle.
In the third quarter, sales in France, which accounts for nearly half the group’s turnover, totaled 10.15 billion euros, or $13.45 billion, up 1.4 percent versus the same period a year earlier. The hypermarkets segment posted a 2 percent sales increase, while supermarkets were down 0.3 percent.
In hypermarkets, food sales rose for the fourth consecutive quarter and sales of apparel and general merchandise were resilient, thanks to favorable weather in July. Traffic was up for the second consecutive quarter as Carrefour continued to improve its price perception among consumers, Sivignon noted.
“Since the hypermarkets are now back doing their homework, which is to offer products at entry price, it probably makes life for hard discounters a touch more difficult and as a result, from that perspective, there might be a bit of a rebalancing of market share,” he said, without disclosing exact figures.
Sales in other European countries decreased 1.7 percent to 5.41 billion euros, or $7.16 billion. As in the previous quarter, Spain proved relatively resilient, while Italy remained volatile amid heavy discounting.
“We are still in an uncertain environment in Europe and I do not believe that has really changed, but we continue to work, we continue to invest, we continue to monitor our expenses and we clearly see numbers which are still negative but improving in terms of trends,” said Sivignon.
In Latin America, revenues were down 8.5 percent to 3.71 billion euros, or $4.92 billion, reflecting the depreciation of the Brazilian real and the Argentine peso against the euro. Stripping out the impact of currency fluctuations, sales in Latin America were up 11.2 percent during the period.
“We continue to watch currency movements and their impacts on our financials inthese two countries,” the executive said.
Asia posted a 0.5 percent rise to 1.84 billion euros, or $2.43 billion, with China recording its second consecutive quarter of like-for-like growth.