PARIS — Carrefour SA stock advanced strongly on Wednesday after the company reported a rise in sales during the third quarter, boosted by business in Latin America and an improvement in France, its largest market.
Revenues at the world’s second-biggest retailer behind Wal-Mart Stores Inc. advanced 1.1 percent during the three months ended Sept. 30 to 21.78 billion euros, or $24.32 billion at average exchange rates. The turnout broadly beat financial analysts’ median consensus estimations of 21.71 billion euros, or $24.24 billion.
Negative currency effects and petrol prices unfavorably impacted revenues by 1.7 percent and 0.8 percent, respectively.
Excluding petrol and calendar impacts, Carrefour’s organic gains in the period stood at 3.1 percent, up from an increase of 2.7 percent in the second quarter.
Investors responded positively to the quarterly results, pushing Carrefour stock up 4.7 percent by the close of the Paris Bourse on Wednesday to 24.57 euros, or $26.95.
“Overall, Carrefour showed good momentum illustrated by a return to like-for-like growth in France, over challenging comps, with good performance in food,” said Pierre-Jean Sivignon, Carrefour’s chief financial officer, during a call with bankers and journalists on Wednesday morning. He was referring to the 1.2 percent sales rise in the company’s home market.
The executive also highlighted the company’s strong like-for-like gains in most European countries and another “excellent” performance in Latin America, where revenues were up 14.2 percent, including a 12.4 percent gain in Brazil on a comparable basis.
Sivignon further pointed to a sequential improvement in China, where the pace of decline was 7.8 percent in like-for-like terms, versus 9.3 percent in the second quarter.
He also called the market estimates of 2.45 billion euros, or $2.69 billion, for Carrefour’s earnings before interest and tax this year “still achievable.”
“As far as the guidance is concerned, I think we have clearly a market situation with strong competition on prices, promotion, [a] slow consumption environment that is present today and in this context as a leader we have decided to gain foothold,” he continued, adding that’s being done “with a more aggressive approach, price promotion, loyalty program, communication.”
Carrefour said it closed or disposed of 126 stores in the third quarter, bringing its total network to 11,812 as of Sept. 30.
During the first nine months of 2016, the retailer registered sales of 62.33 billion euros, or $69.57 billion at average exchange rates, down 2.4 percent in reported terms and up 2.9 percent on an organic basis.
Looking ahead to the fourth quarter, Sivignon expects markets will remain competitive, while Carrefour continues investing in its future.
“We are modernizing our stores. We are enhancing the attractiveness of our sites. We are expanding our store network, both organically as well as through targeted acquisitions. We are accelerating our digital transformation in every country. Our ongoing efforts to revamp our supply chain, as well as rationalize our IT backbone, are making further headway,” he said.