Carrefour

LONDON — The yellow vest protests failed to dent sales in Carrefour’s home market of France, although group revenue in the fourth quarter dipped 2.3 percent to 22.64 billion euros.

The company blamed currency fluctuations, a “complex environment” in China and “difficult” markets in Europe, although at constant exchange, sales in the three months to Dec. 31 rose 2.7 percent. Like-for-like sales in the quarter rose 1.9 percent at constant exchange.

Carrefour said in a trading update Tuesday that sales in France rose 0.5 percent in the fourth quarter despite the regular weekend disruption from the gilets jaunes activists. Like-for-like sales in the region were broadly flat at 10.60 billion euros.

Including the positive impact of hyperinflation and currency movements in Argentina, group sales fell just 0.8 percent to 23 billion euros at current exchange.

Carrefour, the world’s second-largest retailer after Walmart Inc., said it plans to release its full year-end results at the end of February. The group said 2018 recurring operating income is expected to hit 1.93 billion euros, excluding the impact of Argentina’s currency gyrations, an increase of 4 percent compared with 2017.

The overall negative currency impact on profits in 2018 is set to be 160 million euros for the full year. In Tuesday’s statement, the company also touted its “solid” balance sheet, and reminded investors of 1.8 billion euros’ worth of bond issues in 2018, which it said were “largely oversubscribed.”

“What a year it has been, a year that ended with the yellow vests and saw political uncertainty in Brazil and Italy, inflation in Argentina and tensions between the U.S. and China,” said Alexandre Bompard, chairman and chief executive officer, during a call with analysts. “It was a stimulating context, to say the least.”

Despite all the geopolitical drama, Bompard described the fourth-quarter performance as “solid” and said he was pleased with the company’s pursuit of its 2022 transformation plan, a turnaround effort aimed at making Carrefour faster, leaner and more digitally savvy, thanks in part to alliances with the likes of Tesco, Super U, Google and IBM.

Carrefour has also been increasing its food offer, with a focus on healthy eating, organic produce, quality and animal welfare controls and traceability throughout the supply chain.

“Carrefour has become the leader in healthy eating, and we are fully equipped to become a food e-commerce leader,” said Bompard, pointing to a 30 percent uptick in food e-commerce sales in the quarter, and to an increase in the amount of organic products sold compared with last year.

Bompard referred to 2018 as the year of “healthy eating and digital” and called the 2022 plan “a series of overlapping sprints,” rather than a marathon.

Despite those gains, geopolitical challenges, as well as structural ones, remain.

While like-for-like sales were broadly flat in the fourth quarter in France, hypermarkets — which are mostly located off highways in out-of-town shopping centers — were particularly hit by the gilets jaunes. Protesters nationwide clogged traffic on highways and at France’s borders, knocking out speed cameras and defacing road signs.

Including value-added tax, hypermarket sales fell 2.2 percent on a like-for-like basis, while supermarket sales climbed 1.9 percent, and convenience and other format stores were up 3.1 percent in the fourth quarter.

Sales across Europe were down 1.7 percent on a like-for-like basis, with Italy, Belgium and Spain notching single-digit declines and Poland and Romania growing 2.1 percent and 3.2 percent, respectively.

Sales in Latin America were up 12.9 percent, boosted by Argentina, while in Asia they were down 4.1 percent, with China falling 6.2 percent and Taiwan climbing 1.1 percent.

For the full year, group sales reached 85.16 billion euros, falling 2.8 percent and rising 2.5 percent at constant rates. Sales were up 1.4 percent on a like-for-like basis.

Taking into account hyperinflation and currency impacts from Argentina, year-end sales were down 3.1 percent to 84.92 billion euros. They rose 1.4 percent on a like-for-like basis.

In the full year, France saw sales climb 1.1 percent to 39.9 billion euros, with like-for-like sales up 0.3 percent.