CARREFOUR CONFIDENT AFTER AN ACCELERATION IN FIRST QUARTER SALES
by Dominique Vidalon
PARIS (Reuters) – Carrefour, the number one European food retailer, said on Wednesday it was confident in its ability to achieve the main objectives of its recovery plan after an acceleration in sales growth in the first quarter, thanks others to the dynamism of its activities in Brazil.
The French group has confirmed that it is aiming for free cash flow of more than one billion euros this year and, faced with accelerating inflation, it has raised its annual cost reduction target to 900 million euros, as part of the current savings plan, increased to 2.7 billion for the period 2021-2023.
He added that he had already bought back 400 million euros of his own shares under the program for a total amount of 750 million launched in February, adding that the second tranche of these buybacks would be launched in the coming days.
Cash has become a key issue for the group, which must finance the development of its e-commerce activities and cannot rely on external resources after the failure last year of two merger projects, the first with the Canadian Couche-Tard, the second with the French Auchan.
Carrefour achieved over the first three months of the year a turnover of 20.239 billion euros, up 3.4% over one year on a like-for-like basis.
Its sales remained stable in France, still on a like-for-like basis, while they posted growth of 3.4% in Spain and 7.5% in Brazil. Their growth was limited to 0.7% in the fourth quarter of last year.
Carrefour is currently engaged in the final part of the five-year plan launched in January 2018 to reduce its costs and increase its investments in order to boost its growth and profitability in the face of competition from online sales giants such as Amazon and specialists in the discount like Lidl.
Its CEO, Alexandre Bompard, reappointed last May to head the group for three years, must develop a new strategic plan, an approach that includes a review of assets.
On the stock market, Carrefour shares have gained 27% since the start of the year, but its price remains 7% below the level at which it was trading before the arrival of Alexandre Bompard in July 2017.
(Report Dominique Vidalon, French version Marc Angrand, edited by Jean-Michel Bélot and Bertrand Boucey)