French retailer Carrefour SA announced Friday that first-quarter sales fell, hit by lower revenue from fuel and currency pressure in emerging markets.
The company, which vies with Tesco PLC for the title of the world’s second-largest retailer after U.S.-based Wal-Mart Stores Inc., said sales for the three months ended March 30 declined 4.3% to EUR20.1 billion ($22.64 billion) from a year earlier, due in part to currency losses and lower revenue from petrol. Analysts had expected sales of EUR20 billion.
On a like-for-like basis, excluding currency and calendar effects and petrol sales, revenue rose 3.1%, following a solid performance from Carrefour’s businesses outside of France.
In France, where Carrefour does almost half of its business, like-for-like sales were flat at EUR9.3 billion. The company said, however, that food sales had grown in the first quarter for the fourth consecutive year.
International sales grew 5.3% on a like-for-like basis, with Latin America the standout performer. In Brazil, where the economy is in recession, sales grew 9.9% as all Carrefour’s formats expanded. Asia sales fell 4.9% on the same basis as the retailer continues to restructure its operations in China.
With currency effects included, however, sales in Latin America were down 15%, within which Brazil fell 13%, while sales in Asia were down 7.1%.
Chief Executive Georges Plassat took the helm of Carrefour in 2012 after the retailer endured years of declining sales and strategic missteps. Having returned the company to growth, Mr. Plassat is now restructuring Carrefour’s operations in China and working to increase nonfood sales in Europe. He is also seeking to reduce Carrefour’s reliance on large hypermarkets, which account for roughly 50% of the company’s sales, in favor of smaller convenience stores.
On Thursday, rival Groupe Casino SA reported an 11% decline in first-quarter revenue, as the supermarket operator’s exposure to Latin America offset sales growth in France.
Pierre-Jean Sivignon, Carrefour’s chief financial officer, said analyst expectations for earnings before interests and taxes of EUR2.5 billion for the current year seemed “reasonable.”