Carrefour SA

PARIS — Carrefour SA has downgraded its 2017 profit outlook for a second time. The retailer, which reported its 2017 sales on Thursday after market close, expects to announce recurring operating profit down approximately 15 percent, to 2 billion euros, when it reveals its full results on Feb. 28. It is the second time in six months it has lowered its guidance, after downgrading its previous stronger forecast to 12 percent in August.

“2017 has been a difficult year,” said chief executive officer Matthieu Malige during a conference call.

“This performance reflects strong commercial pressure, notably in France through the year, rising distribution costs in our main markets, an increase in depreciation after a period of significant investments, and a more difficult situation in Argentina.”

Nevertheless, Carrefour, the world’s second-largest retailer after Wal-Mart Stores Inc., reported an improved fourth-quarter 2017 performance, saying it was boosted by more favorable momentum across its store formats in France and successful domestic Black Friday and year-end campaigns.

As a result, it was able to beat consensus estimates for its annual sales, which came in up 3 percent to 88.24 billion euros. On a like-for-like basis and excluding petrol, annual sales growth was 1.6 percent.

Carrefour’s sales for the three months ended Dec. 31 fell 0.2 percent to 23.33 billion euros. On a like-for-like basis and excluding petrol, they grew 1.9 percent.

The retailer described this as a “sharp improvement” over the previous quarter because of improved trends in France, although growth in Brazil remained weak because of food deflation.

In France, sales fell 0.5 percent to 10.71 billion euros, growing 1.1 percent on a like-for-like basis. International revenues increased 0.1 percent to 12.62 billion euros and were up 2.1 percent like-for-like. Sales performance was contrasted in Europe, with tough comparables in Southern Europe negatively impacting business. Overall, sales in Europe outside France grew 3.4 percent, or 0.4 percent like-for-like. In Latin America, revenues fell 2.4 percent, but were up 5.9 percent on a comparable and constant-currency basis. Asian sales fell 5.4 percent, or 3 percent like-for-like, impacted by ongoing negative trends in China, Carrefour said.

“Our better fourth quarter sales performance was achieved in a challenging environment, with heightened competitive pressure in France and other markets as well as food deflation in Brazil,” said Malige.

The company’s non-food categories in particular were boosted by a successful Black Friday campaign, Malige said, while it is seeing improvements in its textile business after implementing changes to its assortment and commercial policy.

Malige, who joined Carrefour in October, declined to elaborate on the company’s strategy looking forward during the call. Ceo Alexandre Bompard, who arrived in July, will unveil Carrefour’s hotly anticipated “transformation plan” next Tuesday in Paris, as reported.