CARREFOUR PARIS (Reuters) - Carrefour (>> Carrefour), Europe's largest retailer, on Thursday reported a slowdown in second-quarter sales reflecting competitive pressure in its top French market and slumping sales in China amid weak consumption.
Sales however picked up in Spain, the group's third-largest market, and held up well in a slowing Brazilian economy, unlike those of smaller rival Casino (>> Casino Guichard).
Carrefour, which makes 73 percent of its sales in Europe, is seeking to seal a global revival by focusing on price and cost cuts, expansion into smaller convenience stores, while also renovating its core traditional hypermarket network to boost growth despite weak consumer spending.
Carrefour finance head Pierre-Jean Sivignon said the market consensus for 2015 earnings before interest and taxes (EBIT) of 2.51-2.53 billion euros was "reasonable" and that while the retailer was still ready to float its Brazilian business, market conditions were not yet right.
"An IPO will depend on market conditions. We do not need an IPO to fund our growth in Brazil," he told a conference call.
The world's second-largest listed retailer after Wal-Mart (>> Wal-Mart Stores, Inc.) said second-quarter sales were 21.4 billion euros ($23.3 billion), slightly above the average forecast of 21.3 billion euros in a poll of analysts.
Stripping out fuel and currencies, sales rose 2.6 percent in the quarter, down from 3.2 percent growth in the first quarter.
Same-store sales at French hypermarkets rose 0.5 percent after a 2.1 percent increase in the first quarter.
The slowdown reflected price competition in the French market and higher year-ago comparables, when electronics sales were boosted by the soccer World Cup. "In France, the underlying trend remains solid," Sivignon said.
At 0954 GMT Carrefour shares were up 1.92 percent, outperforming a European sector <.SXRP>, up 1.21 percent.
"A relatively resilient performance...The group offers better visibility than many peers but the stock looks fully valued in the short-term, trading on 18 times 2015 estimated earnings against a 17.3 times sector average," said Societe Generale analysts, who have a "hold" rating.
BRAZIL RESILIENCE
Growth in Brazil, Carrefour's largest market after France and an emerging market the company has earmarked for expansion, grew 7.1 percent in the quarter.
That contrasted with Casino, which on Wednesday posted a 24 percent slump in second-quarter consumer electronics sales in Brazil.
Carrefour has been able to better weather the Brazilian slowdown because unlike Casino it sells mostly food there and is thus less vulnerable to falling consumer spending. Carrefour is also starting to benefit from the renovation of some of its hypermarkets in Brazil.
In China, however, sales fell 12.3 percent as slower economic growth curbed consumption. The group's response has been to boost expansion in e-commerce and convenience stores and to open logistics centres in China to reduce costs.
(Reporting by Dominique Vidalon; Editing by Leigh Thomas and Jon Boyle)
By Dominique Vidalon
