Carrefour Shares Falls as Retailer Fails to Reassure on Chinaby
China won't rebound until the end of 2016, CEO Plassat says
Co. says it's still waiting for right moment to IPO Carmila
Carrefour SA shares fell in Paris after full-year profit growth at France’s largest retailer was held back by losses in China.
The stock slid as much as 4.9 percent to 24.10 euros, the steepest drop in the benchmark CAC 40 Index.
Carrefour is making an operating loss in China, where the retailer is seeking to tackle a shift by shoppers toward convenience. The Boulogne Billancourt, France-based company said Thursday it has appointed a chief operating officer for the Asian country, but that earnings there won’t rebound there until at least the end of this year.
China, which accounts for about 5 percent of sales, “remains a substantial spot of weakness for the group,” said Michael Romer, an analyst at Bank J Safra Sarasin.
Carrefour’s adjusted net income rose 7.1 percent to 1.11 billion euros ($1.2 billion), coming up short of the 1.15 billion-euro average estimate.
The shares were also weighed down by an “uninspiring” presentation that was “long on words, short on financial detail,” according to John Kershaw, an analyst at Exane BNP Paribas.
Carrefour said Thursday it’s still waiting for the right moment for an initial public offering of its shopping mall property unit. The division, called Carmila, might be worth 4.5 billion euros, according to Sanford C. Bernstein analyst Bruno Monteyne.
Carrefour set up Carmila in 2014 with a group of investors including Axa SA and Colony Capital taking a 58 percent stake. The property company controls more than 180 sites near Carrefour hypermarkets in France, Italy and Spain to make sure they are properly maintained. While France’s CAC 40 Index dropped 16 percent from the start of January to mid-February, it has since bounced back.