No profit warning for Carrefour as trading still weak in Eurozone

City A.M. Reporter
CARREFOUR, Europe’s biggest retailer, defied fears of another profit warning yesterday, sending its shares soaring as new management said that while trading remained weak in austerity-hit countries like Spain and Italy, it was not getting worse.

The French group said it was “comfortable” with the market consensus for 2012 earnings before interest and taxes of €2.03-2.09bn, which would mean a year-on-year profit drop of five to eight per cent.

Carrefour said second-quarter like-for-like sales dropped 1.3 per cent, dragged down by falling demand in recession-hit Italy and Spain and sluggish French hypermarket revenue. Second-quarter sales were €21.72bn (£17.2bn), slightly above the average of analyst estimates of €21.65bn.

Stripping out fuel and currencies, revenue at its French hypermarkets fell 5.7 per cent against a 5.8 per cent fall in the first quarter. Finance chief Pierre-Jean Sivignon said the first half usually contributes around 35 per cent to full-year profit.

Quarterly like-for-like sales excluding petrol fell 7.4 per cent in Spain and 4.3 per cent in Italy.

However, the downward sales trend slowed in Spain in the second quarter from the first quarter, and in Italy, non-food hypermarket sales were improving, Carrefour said.