PARIS — The market reacted buoyantly to Carrefour SA’s fourth-quarter and full-year sales results Thursday, with its share price rising 6.1 percent to close at 20.50 euros, or $27.25, on the Paris bourse, confirming investor confidence in the early stages of the retailer’s ongoing turnaround.

Carrefour SA said sales rose 0.8 percent to 22.85 billion euros, or $30.26 billion, for the fourth quarter of 2012, supported by robust activity in South America, stronger food sales across markets, and an improvement in its ailing domestic hypermarket business.

“In spite of a challenging global environment, Carrefour registered growth in both Q4 and the full year,” the company’s chief financial officer Pierre-Jean Sivignon said during a conference call.

The world’s second-largest retailer behind Wal-Mart Stores Inc. said the period had confirmed an improvement in consumption in France, its largest market, representing sales of 10.54 billion euros, or $13.93 billion, a 0.6 percent increase. Excluding gasoline, domestic revenues fell 0.9 percent, the company said.


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Its French hypermarkets saw like-for-like sales of 6.04 billion euros, or $7.98 billion. Excluding gas, hypermarket sales were down 2.3 percent. Supermarkets, with total sales of 3.39 billion euros, or $4.48 billion, grew 0.1 percent exclusive of gas.

“In non-food, it remains difficult,” Sivignon revealed, citing weakness in consumer electronics notably. He that “we saw textile gradually recovering.”

Non-food represents around 30 percent of Carrefour’s hypermarket sales, and apparel is an important part of this. Sivignon said that the company’s new chief executive officer, Georges Plassat, is likely to comment further on non-food strategy at Carrefour’s annual results presentation on March 7.

Business in the rest of Europe remained challenging, with revenues falling 2.4 percent to 6.39 billion euros, or $8.44 billion, due to the tough economic climate.

“In Spain, we were impacted by additional austerity measures,” Sivignon said. In Italy, he added, business was affected by a competitive trading environment as well as the macro-economic situation.

Turkey and Romania both saw like-for-like growth, as did Belgium, which confirmed momentum from recent quarters, Sivignon added.

In Brazil, Carrefour’s second largest market after France, sales grew 2.2 percent to 3.29 billion euros, or $4.35 billion. On a constant currency basis and exclusive of gas, sales grew 13.3 percent.

Business in Argentina grew 14.4 percent to 983 million euros, or $1.3 billion, driven partly by the contribution of stores acquired from Eki in June 2012, which have now completed their conversion to the Carrefour banner.


In Asia, Sivignon cited a “slight improvement” in business in the fourth quarter. Sales growth of 5.6 percent to 1.66 billion euros, or $2.19 billion, masked the appreciation of both Chinese and Taiwanese currencies. On a like-for-like basis, Carrefour’s sales in the region fell 3.9 percent.

In China, Sivignon said: “We posted slightly better performance in this quarter compared to last, particularly in non-food.”

Carrefour China saw a like-for-like drop in revenues of 3.1 percent in Q4.

“We were able to offset this weaker consumption through expansion,” Sivignon said. The retailer opened 18 Chinese stores last year, including 10 in the fourth quarter.

“Chinese New Year [beginning Feb. 10] will be a good checkpoint of where China is going,” he predicted.

For the 12-month period, Carrefour said revenues grew 1 percent to 86.56 billion euros, or $114.31 billion, with emerging markets, particularly Latin America, performing well.

Sales for 2012 were restated to exclude businesses divested during the year, which include non-strategic operations in Colombia, Greece, Indonesia, Malaysia and Singapore.

“Part of the proceeds from divestments will be used to reduce debt, [as well as for] maintenance and expansion,” Sivignon revealed.

The retailer, which no longer gives earnings guidance, confirmed that it expects 2012 recurring operating income to conform to the current median consensus,which stands at around 2.07 billion euros, or $2.73 billion, in line with previous projections.

“Our Q4 was slightly ahead of the expectations we had in terms of bottom line,” said Sivignon.
All dollar figures are calculated at average exchange rates for the period to which they refer.

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