Brazil lifts Casino Q3 sales, French hypermarkets improve

Reuters

* Casino Q3 sales 11.78 bln eur vs Rtrs poll avg 11.7 bln

* French hypermarket sales fall 4.7 pct vs 7.9 pct drop inQ2

* French hypermarket traffic and volumes positive

* CFO "very comfortable" with market consensus for 2013 EBIT

By Dominique Vidalon

PARIS, Oct 14 (Reuters) - Casino said sales growthaccelerated in the third quarter thanks to robust demand inBrazil and an improvement at its Geant hypermarkets in France,where the retailer started to benefit from price cuts introducedat the end of last year.

Finance director Antoine Giscard d'Estaing told journalistson Monday that Casino now hoped to return to positive growth inall its French businesses between the end of 2013 and early2014.

He also said he was "very comfortable" with marketexpectations for 2013 earnings before interest and taxes of 2.35billion euros as Casino banks on strong profitable growth ininternational markets, which make up 57 percent of sales.

Group sales for Casino, which controls top Brazilianretailer Grupo Pao de Acucar, reached 11.78 billioneuros ($16 billion) in the quarter. Analysts had on averageexpected sales of 11.7 billion, according to a Reuters poll.

Stripping out acquisitions, currency and calendar effects,and petrol, this was a like-for-like rise of 6.5 percent and anacceleration from 3 percent growth in the second quarter, Casinosaid in a statement on Monday.

"There are encouraging signs in France despite an economicclimate that is not getting easier," he said.

Consumer confidence started improving from the secondquarter but remains "low" while consumers keep a tight rein onspending despite low inflation, he added.

Retailers across Europe have been struggling as shoppers'disposable income is squeezed by subdued wage growth andausterity measures.

Casino has been expanding in the fast-growing emergingmarkets of Thailand, Brazil, Vietnam and Colombia, away fromweaker growth in Europe.

POSITIVE HYPERMARKET TREND

In France, closely watched like-for-like hypermarket salesfell 4.7 percent in the quarter, compared with a 7.9 percentdrop in the second quarter and an 11.5 percent fall in thefirst. Analysts had expected a sales decline of 5.5-6 percent.

In the last quarter of 2012, Casino funded permanent pricecuts on basic products by reducing promotions, a move thatinitially cost it some customers. It typically takes severalmonths before price cuts lead to stronger sales volumes.

"Geant's traffic and food volumes have turned positiveagain," Giscard d'Estaing said, citing rises of 1.3 percent fortraffic and 1.5 percent for food in the quarter.

This improvement came earlier than Casino had expected asthe retailer was initially targeting the end of 2013 for areturn to positive hypermarket traffic and food volumes.

French hypermarket traffic rose 2.4 percent and food volumesgained 7.7 percent in the four weeks to Oct. 14, he added.

"This paves the way for positive sales numbers probably inthe second quarter next year," he said.

In emerging markets, Latin America posted like-for-likesales growth of 13.5 percent, while Asia grew 8.5 percent in thequarter.

Casino shares have gained 9.5 percent this year,underperforming a 37 percent rise in Carrefour and a16.7 percent gain in the European retail sector.

Casino trades at 14.56 times 12-month forward earningsagainst 17.33 times for Carrefour and 11.04 times for Britain'sTesco.

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