Carrefour keeps 2010 goals, August disappoints
PARIS (Reuters) - Carrefour (CARR.PA), Europe's top retailer, said the summer sales trend was mixed in Europe but demand was holding up in emerging markets and confirmed it expected operating profit to rise this year.
Tight cost control and buoyant emerging markets lifted first-half profit by 7.6 percent, in line with guidance given in July, the company said on Tuesday.
Chief Financial Officer Pierre Bouchut told a conference call that sales trends at Carrefour were "rather satisfactory" in Europe in July but "slightly disappointing" in August while demand was sustained in emerging markets.
The world's No.2 retailer by sales behind U.S. group Wal-Mart (WMT.N) confirmed that it expected an underlying operating profit of around 3.1 billion euros $3.9 billion (2.5 billion pounds) this year, having achieved 1.096 billion in the first-half.
"Our transformation plan is delivering planned results and makes us confident of achieving our 2010 objectives," Chief Executive Lars Olofsson said in a statement.
Carrefour has launched a three-year overhaul plan aimed at tackling underperformance in its main western European markets and delivering 4.5 billion euros of savings.
The French group, which has over 15,500 stores in 35 countries, achieved cost savings of 236 million euros in the first half, nearly half the 500 million targeted for the full year.
By 0728 GMT, Carrefour shares were up 1.1 percent at 36.49 euros, having erased earlier losses.
"First-half results are in line with July 15 guidance, FY 2010 outlook unchanged and in our view it remains 'hold' at best, with better value elsewhere in the sector, particularly looking at Tesco, Morrison and Ahold," RBS analysts said in a note.
The group, whose stores range from Ed hard discount stores to Carrefour hypermarkets, returned to a first-half net profit of 67 million euros after a loss of 48 million in the same period in 2009.
Retailers, particularly in developed markets, are battling to emerge from a deep recession and worry that steps to rein in government debt -- like higher taxes and public spending cuts -- could hit consumer demand in the months ahead.
Last week, Dutch grocer Ahold (AHLN.AS) posted a small rise in quarterly underlying sales in its main U.S. market, bucking the trend in an industry which has been hit hard by fears over the strength of the economic recovery.
Earlier this month, Wal-Mart Stores Inc said it would focus on curbing expenses to boost profits this year as consumer sentiment remains soft.
CFO Bouchut repeated on Tuesday Carrefour was looking at exiting countries where it was not among the market leaders, while seeking to expand in markets where it was or could be a leader.
But he would not comment on reports the group was looking to sell assets in southeast Asia.
Carrefour shares have underperformed the STOXX Europe 600 retail index .SXRP this year but trade at a higher multiple of forecast earnings than Wal-Mart and British rival Tesco (TSCO.L) due to optimism about its turnaround plan.
(Editing by James Regan and David Cowell)
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