Carrefour says French recovery gains momentum

Reuters
A customer pushes a shopping trolley as she arrives at the Carrefour's Bercy hypermarket in Charenton Le Pont, near Paris
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A customer pushes a shopping trolley as she arrives at the Carrefour's Bercy hypermarket in Charenton Le Pont, near Paris, August 29, 2013. REUTERS/Charles Platiau

By Dominique Vidalon

PARIS (Reuters) - Carrefour (PAR:CA) said French hypermarket sales returned to growth in the third quarter while China also improved, further reassuring investors about Chief Executive Georges Plassat's ability to revive the world's second-largest retailer.

Growth in Brazil, Carrefour's largest market after France, was robust in the quarter while austerity-hit Spain also confirmed the resilience seen in the previous quarter, Carrefour said on Thursday.

Chief Financial Officer Pierre-Jean Sivignon told reporters the market consensus for 2013 earnings before interest and taxes of around 2.19 billion euros (1.84 billion pounds) was "reasonable", provided Latin American currencies did not weaken versus the euro.

"Carrefour is showing solid growth in its domestic market as well as abroad," Sivignon said.

The world's largest retailer after Wal-Mart (WMT.N) said third-quarter sales were 21.11 billion euros, for like-for-like growth of 3.1 percent, excluding fuel.

Closely watched same-store sales at Carrefour's French hypermarkets rose 3.0 percent, reversing a 1.1 percent decline in the second quarter and a 2.9 percent drop in the first.

Analysts had eyed a rise of between 1.5 percent and 2.7 percent in the quarter in French hypermarket sales.

"Our price image and store traffic continues to improve," Sivignon said, adding that all store formats in France had achieved positive growth in the quarter.

France, which contributes more than 40 percent of group sales, is key for investors to assess whether Carrefour can finally come to grips with its problems in Europe.

Carrefour has struggled for years in the region, partly due to a reliance on the hypermarket format it pioneered as time-pressed customers shop more locally and online, and buy non-food goods from specialists.

Plassat, who joined in May 2012, has responded in France by cutting costs, revamping stores, improving price competitiveness, simplifying product offerings and giving more autonomy to store managers.

Emerging markets were another bright spot, with like-for-like sales in China growing for the second consecutive quarter, up 1.1 percent after a 0.4 percent rise in the second quarter.

Brazil achieved like-for-like growth of 8.8 percent against 7.1 percent in the second quarter.

(Editing by James Regan)

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