Casino Guichard-Perrachon SA, the owner of the Monoprix and Geant supermarket chains, reported first-half profit that beat analysts’ estimates as cost-cutting measures helped offset declining sales in France.
Trading profit rose 52 percent to 969 million euros ($1.28 billion), boosted by Casino’s buyout of its Brazilian unit and the Monoprix chain, the Saint Etienne, France-based grocer said today in a statement. Analysts predicted 930 million euros, according to the median of 11 estimates surveyed by Bloomberg. Revenue advanced 37 percent to 23.8 billion euros.
Cost-cutting plans at Casino France helped limit the impact of declining sales on trading profit, while Franprix-Leader Price’s trading margin is stable and Monoprix’s trading margin is improving, Casino said. Casino is also cutting prices in France in a bid to revive sales in its home market as government austerity measures and rising unemployment weigh on consumer spending.
“We continue to like the story,” Andrew Gwynn, an analyst at Exane BNP Paribas, said in a note to clients. He has an outperform rating on the shares. Profit in each of Casino’s French units was better than expected, he said.
Casino rose as much as 4.1 percent and was up 3.2 percent at 79.24 euros at 9:04 a.m. in Paris trading.
Price cuts and continued expansion abroad should benefit the grocer in the second half, Chairman and Chief Executive Officer Jean-Charles Naouri said in the statement. Casino confirmed its 2013 targets.
Same-store sales gained 2.8 percent, excluding currency moves, gasoline and calendar effects.