PARIS — Shares in Carrefour SA zoomed up 6.6 percent on Friday as the French retailer continued to demonstrate improvements across geographies, formats and product categories.
The world’s second-largest retailer behind Wal-Mart Stores Inc. said sales grew 2.2 percent in the third quarter, as southern Europe picked up momentum and Latin America continued to deliver sales growth, despite the economic crisis roiling Brazil.
The company posted sales of 21.54 billion euros, or $23.97 billion at average exchange rates, in the three months to Sept. 30, slightly above analysts’ expectations. Excluding petrol and calendar impacts, Carrefour’s organic growth in the quarter was 4.2 percent.
“Carrefour posted continued growth and solid momentum in the third quarter,” chief financial officer Pierre-Jean Sivignon said in a conference call with analysts on Friday.
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“This quarter showed balanced growth in most of our key markets with, firstly, further growth in France, secondly, a strong recovery in southern Europe, and finally, another excellent performance in Latin America, setting aside the currency effect, and this despite a more difficult environment in the region,” he added.
Although Carrefour does not provide official guidance, Sivignon said a consensus forecast for 2015 recurring operating income of 2.45 billion euros, or $2.75 billion at current exchange, was “reasonable.”
He noted the figure had been revised downward from previous estimates to reflect the impact of less favorable currency effects, mainly stemming from the devaluation of the Brazilian real.
During the third quarter, France posted a rise of 1.6 percent in like-for-like sales, driven by the performance of its supermarkets and convenience stores. Overseas markets were up 5.1 percent, with Latin America recording a sales jump of 11.7 percent, compensating for weakness in Asia, which posted a 7.5 percent drop.
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Sivignon noted that France had now delivered organic sales growth for 11 quarters in a row, despite a persistently tough and competitive environment. In the third quarter, Carrefour ramped up the pace of converting the hard discount Dia stores it purchased in 2014 to existing Carrefour banners.
The executive credited “consistency, continuity and discipline” for the retailer’s solid performance in its key domestic market. “In Carrefour, we do not have an obsession for market share,” he noted. “We see it as the ultimate conclusion of a job well done.”
Sales in other European countries were up 4.2 percent on a comparable basis, helped by strong momentum in Spain and Italy, which posted increases of 4.6 percent and 5.9 percent, respectively.
“It’s a bit, in a way, the highlight of this Q3,” Sivignon said of the Italian performance, noting it partly reflected the introduction of the Carrefour Market Gourmet format, open 24 hours a day and seven days a week, which has boosted like-for-like sales and helped to reposition Carrefour as an innovative banner.
Italy and Spain also benefited from the role of real estate investment firm Carmila, which is renovating malls that house Carrefour hypermarkets.
Brazil recorded a 7.4 percent rise in like-for-like sales, despite the downturn in Latin America’s biggest economy, where unemployment has risen to a five-year high. The sales increase was driven by increased traffic and volume and helped by Carrefour’s low dependence on the non-food sector, which turned negative in the quarter.
The sharp depreciation of the Brazilian real versus the euro had an impact on reported sales in Latin America, which were down 2.8 percent in the third quarter, reflecting a negative currency impact of 18.5 percent for the region as a whole.
Like-for-like sales in China were down 11.2 percent during the period as Chinese consumers continued to tighten their purse strings. Carrefour said it was still implementing its action plan in the country, which calls for more targeted openings and selective renovations, among other measures.
The retailer said it added 145 stores in the third quarter, bringing the total network to 12,058 stores as of Sept. 30.
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