• Swings to H1 loss of EUR249m
  • Sales up 2.3% to EUR39.6bn
  • Operating profit down 22% to EUR772m

Carrefour has swung to a first-half loss and cut its forecast for annual profits after half-year earnings were hit by a poor domestic performance and a number of one-off items.

For the six months ended 30 June, the world's second-largest retailer reported an EUR249m (US$359.2m) loss, against an EUR97m profit in the same period last year. Excluding exceptional items, net income still fell 49.3% to EUR153m.

Carrefour recorded charges of EUR884m, which it attributed mainly to a write-down on its Italian operations.

Operating income fell 22% to EUR772m, which was slightly above the EUR760m figure that Carrefour gave in a profit warning last month.

Sales, however, rose 2.3% to EUR39.6bn, or up 1% excluding petrol at constant exchange rates.

Shares in the retailer were down 1.15% to EUR18.43 a share at 16:04 CEST.

Carrefour chairman and CEO Lars Olofsson said that the retailer has decided to "favour sustainable value creation over short-term gains" and, as a result, is forecasting that operating income will be about 15% lower than last year.

Olofsson said the company would be implementing a "new game plan" in its home market, which will see it deploy a new commercial strategy to "regain competitiveness and traffic in our hypermarkets" and adapt to what he called "an increasingly challenging economic environment".

In France, Carrefour reported a 40% drop in operating income in the first half of the year to EUR302m. Sales increased 1.6% to EUR16.8bn but the company attributed part of the under-performance to excessive levels of out-of-stocks in its hypermarkets as it implemented changes to its processes and systems.

In Europe, operating income fell 33.3% to EUR142m. Sales fell 4.6% to EUR11.5bn. Carrefour said that sales were affected in all countries by the challenging economic environment, but more notably in Greece and Italy.

Profits, however, grew in Latin America. Operating income jumped 27.4% to EUR193m as sales increased 11.6% to EUR7.3bn. Carrefour attributed the rise in sales to solid like-for-like growth and continued expansion.

Earnings were also up in Asia, with operating income increasing 10.8% to EUR135m as sales grew 6.7% to EUR3.7bn.