Carrefour Sales Growth Meets Estimates as Europe Accelerates

Carrefour Earnings: What They're Doing Right in Europe
  • Spain is `star performer,' Italy `biggest surprise': analyst
  • Europe is now a growth engine for grocer, CFO Sivignon says

France’s largest retailer Carrefour SA reported further gains in revenue during the third quarter, boosted by accelerating growth in countries such as Spain.

Revenue rose 2.2 percent to 21.5 billion euros ($24.5 billion), Boulogne-Billancourt, France-based Carrefour said Friday before European markets opened. That matched the median of 17 estimates compiled by Bloomberg, as did sales in the grocer’s biggest market of France, which rose 2.3 percent to 10.3 billion euros.

The retailer had a strong quarter in Europe, led by advances in Spain and Italy, which returned to growth. Carrefour has staged a revival in the region by modernizing stores and adding collection points for online orders even as rivals such as Casino Guichard-Perrachon SA step up efforts to win customers. Sales fell in Asia amid weak consumption in China, though growth remained strong in Latin America.

Spain was “the star performer,” said John Kershaw, an analyst at Exane BNP Paribas in London. Italy “was the biggest surprise.”

The shares rose 2.9 percent to 27.98 euros at 9:01 a.m. in Paris.

Revenue rose 4.6 percent in Spain on a like-for-like basis, excluding fuel and calendar effects, beating the 3.5 percent median of analysts’ estimates. Italy surged 5.9 percent on the same basis, exceeding the 2.5 percent predicted gain. Growth in Belgium also exceeded expectations, while sales rose "strongly" in Romania after a reduction in the country’s value-added tax for food.

“Europe has now become a growth engine for Carrefour,” Chief Financial Officer Pierre-Jean Sivignon said on a call with reporters.

Carrefour is comfortable with the 2.45 billion-euro consensus of analysts’ estimates for full-year recurring operating income, the CFO said. The consensus range was 2.51 billion euros to 2.53 billion euros in July. Sivignon attributed the reduction to currencies.

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