FRANCE: Carrefour Growth Accelerates In Q3

Carrefour has reported an acceleration in sales growth for its fiscal third quarter, helped by improving results in France and a continued strong performance in Brazil.

For the three months to end-September, sales were up 1.1% to €21.78bn, but rose by 2.8% when excluding fuel and currency fluctuations. Like-for-like sales were up 3.2% excl. fuel and calendar effects.

Sales in France were down 0.9% to €10.2bn, although LFL sales rose by 1.2% (excl. fuel and calendar effects).  The results were dragged down by a 2.4% drop in overall sales at its hypermarkets and a 0.6% at its supermarkets, but these were partially offset by a 2.9% increase at its convenience stores and other formats.

In the Rest of Europe, sales were up 2.0% to €5.63bn on an adjusted basis (+1.6% reported), even as LFL sales grew by 1.0% (+0.7% reported). The group recorded mild gains in Spain and Belgium (+0.6% each), although its Italian operations continued to suffer, reporting a 1.3% drop.

Carrefour’s Chinese operations continued to struggle, with sales down 5.7% to €1.25bn on an adjusted basis (-11.3% reported), as LFL sales fell by 7.8%, hurt by the continued slowdown in domestic consumption.

However, its unit in Latin America once again helped pull up overall numbers, with sales jumping up 16.9% to €4.23bn on an adjusted basis (+9.7% reported), on LFL growth of 14.2%. The group recorded strong growth in both Brazil (+16.2% adjusted LFL) and Argentina (+18.0% adjusted LFL).

The group added a net 125 new outlets during the quarter, and operates just over 11,800 stores globally.

NAM Implications:
  • Where at: Global retailing depends on domination and success in the home market.
  • Where headed: Carrefour needs to sort its French Connection to keep the Stock-market happy.
  • Effect on you: Pressure/opportunity on French NAMs to help Carrefour improve.
  • Action: Time to re-assess your trading relationship with Carrefour, seek to isolate general retail performance from customer-specific growth, an consider changes in your Invest/Maintain/Divest strategies?