Carrefour in profit boost after savings

THE WORLD’S second biggest retailer Carrefour said yesterday that the summer sales trend was mixed in Europe but demand was holding up in emerging markets with an annual operating profit in its sights.

Tight cost control and a surge in emerging markets lifted first-half operating profit by 7.6 per cent to €82m (£67.8m) while the French company was making headway on its plan to revamp its hypermarkets in Europe to boost lagging sales.

Carrefour has launched a three-year overhaul plan at delivering €4.5bn of savings. Chief executive Lars Olofsson said in a statement: “Our transformation plan is delivering planned results and makes us confident of achieving our 2010 objectives.”

The cautious comments, plus news of an unexpected €69m one-off charge in Brazil, where Carrefour also faces weak hypermarket sales, has kept the shares under pressure. Execution Noble analyst Caroline Gulliver said: “Although figures were in line with expectations, comments from the chief financial officer about the European summer sales took the shine off and it looks as though whilst the French business may be improving, some of Carrefour’s other key markets are deteriorating.”

Carrefour, behind only US group Wal-Mart in sales, confirmed that it expected an underlying operating profit of around €3.1bn for the full year, having achieved €1.096bn in the first-half.