Carrefour Reports Higher Quarterly Sales, Buoyed by Brazil

  • Spain and Italy lead European growth, French hypermarkets fall
  • Analysts' consensus for full-year profit is reasonable: CFO

Carrefour SA, France’s largest retailer, reported stronger first-quarter revenue, boosted by growth in southern Europe and Latin America, and improving sales in China.

Revenue reached 20.1 billion euros ($22.6 billion), Boulogne-Billancourt, France-based Carrefour said Friday in a statement. Analysts expected 20 billion euros, according to the median of 13 estimates compiled by Bloomberg. Growth was 3.1 percent excluding calendar effects and gasoline sales.

With its shares trading at about the same level as seven years ago, Carrefour needs a boost. The company is grappling with a shift towards convenience in China, while seeking to reduce losses at Dia discount stores in its largest market, France. Declines in those markets are being offset by growth in countries such as Brazil, Italy and Spain.

Sales were “reassuring,” said John Kershaw, an analyst at Exane BNP Paribas, who has an outperform rating on the stock. “Expect a share that has been under some pressure to rally today.”

The stock rose 2.3 percent to 25.74 euros as of 9 a.m. in Paris.

Quarterly growth was strongest in Latin America, where sales in Brazil rose 9.9 percent on a like-for-like basis, beating estimates, as all formats expanded in the country, Carrefour said. Spain and Italy, meanwhile, buoyed European sales, with both markets also exceeding estimates. French hypermarket sales fell 0.6 percent and China declined 8.4 percent.

While China remains challenging, the decline has halved since last year, Kershaw said. “Brazil continues to power ahead” and the strong performance in Italy and Spain also bodes well the analyst said, adding he expects French hypermarket sales to improve through 2016.

The 2.5 billion-euro consensus of analysts’ estimates for full-year recurring operating income is reasonable, Chief Financial Officer Pierre-Jean Sivignon said on a call with reporters.

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