FRANCE: Carrefour issues H1 profit warning
Carrefour has warned that its first-half operating profit is expected to have slumped by 23% due to problems in the French retailer's domestic market.
The world's second-largest retailer today (13 July) forecast that group current operating income for the first six months of the year would reach around EUR760m (US$1.1bn).
The figure would compare to the EUR989m Carrefour filed for the first half of 2010, excluding hard discount chain Dia, which the retailer has spun off from the rest of its business.
The profit warning follows Carrefour's admission last month that profits from its French business would fall 35% in the first half of the year.
Carrefour has faced competition in France from the likes of E.Leclerc and Intermarché and has acknowledged that some of its promotions have not paid off.
The retailer, meanwhile, said that its second-quarter sales had risen 1.6% to EUR22.4bn, or by 3% when currency fluctuation is excluded from the numbers. Carrefour's like-for-like sales, excluding fuel and adjusted for "calendar impact", rose 0.2%.
Over the first six months of 2011, sales were up 2.7% at EUR44.6bn and by 2.5% on a constant-currency basis. Like-for-like sales, excluding fuel and adjusted for calendar changes, inched up 0.1%.
In Brazil, where Carrefour's plan to merge its local operations with CBD, the country's largest retailer, has suffered a blow, second-quarter like-for-like sales were up 7.1%. Over the first half of 2011, like-for-likes rose 5.7%.
Yesterday, Abilio Diniz, the Brazilian tycoon that had helped draw up the plan to merge Carrefour with CBD, put the proposal on hold.
Diniz co-owns CBD, also known by its trading name of Grupo Pao de Acucar, with French retailer Casino, which, at a meeting in Paris yesterday afternoon, reiterated its opposition to the plan.
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