Casino Profit Matches Estimates as French Price Cuts WeighAndrew Roberts
Casino Guichard-Perrachon SA, the French owner of Brazil’s Pao de Acucar supermarket chain, reported profit that declined in line with analysts’ estimates as it cut prices in its domestic market to spur sales.
First-half trading profit fell to 880 million euros ($1.18 billion), from 894 million euros a year earlier, Saint Etienne-based Casino said today in a statement. Analysts predicted 881.6 million euros, according to the average of five estimates compiled by Bloomberg.
Casino is cutting prices in France, while introducing new formats such as cash-and-carry in Thailand and online stores in South America, its strongest market. Earlier this month, the grocer reported its best domestic organic sales performance in more than two years and a fourth straight quarter of double-digit international revenue growth.
The first-half results were “more or less as expected,” said Exane BNP Paribas analyst Andrew Gwynn in a note to clients. Weaker profit in France was mostly compensated for by the international business, according to the analyst, who has a neutral recommendation on the shares.
The stock traded 0.2 percent higher at 94.43 euros at 9:07 a.m. in Paris, giving the company a market value of 10.7 billion euros.
Casino confirmed its targets for 2014, including generating trading profit growth in organic terms, which removes the effects of currency moves and assumes an unchanged scope of business.
The retailer said it expects full-year organic sales in its home market to increase, after a 2.3 percent decline in the first half.
The first-half “confirms the recovery under way at Geant in France,” Chairman Jean-Charles Naouri said in the statement. Second-quarter organic sales in France declined 0.2 percent, the retailer said.
The company said earlier this month it’s comfortable with the consensus of analyst estimates for annual trading profit of about 2.4 billion euros.