Casino Maintains Solid International Growth
07/26/2012| 02:51am US/Eastern
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By Nadya Masidlover
PARIS--French retailer Casino Guichard-Perrachon SA (>> CASINO GUICHARD) Thursday said double-digit revenue growth in its international business is offsetting slowing sales at home, despite posting a fall in first-half net profit.
Casino--France's No. 2 retailer by sales, after Carrefour SA (>> CARREFOUR)--reiterated its targets for 2012, including achieving sales growth of above 10% and conserving its share of the French food market.
The results once again highlight how the grocer's focus on fast-growing emerging markets has allowed it to fare better than those of its competitors that remain heavily dependent on business in Europe, where demand is being sapped by the dire economic situation.
For Casino, the first six months of the year also saw an improvement in relations with two partners, as it took full control of Brazilian unit Grupo Pao de Acucar (>> Cia Brasil. de Distrib. Pao de Acucar) and reached a preliminary agreement on French supermarket chain Monoprix.
Over the first six months of the year, trading profit came out slightly above expectations, up 12% at 638 million euros ($771.98 million).
Net profit fell 6.7% compared with a year earlier to EUR125 million, though underlying net profit--which excludes one-off elements--remained stable.
Business outside of France contributed to around 60% its trading profit, as the company continued to expand in international markets, where rising incomes and growing middle classes have boosted consumer demand.
Sales in the first half increased 7.5% to EUR17.35 billion.
In the three months from April to June, sales rose 1.7% on an organic basis excluding petrol, compared with a year earlier to EUR8.61 billion, after growing 6.5% in the first quarter, as solid business abroad offset a fall in French sales, amid a negative calendar effect.
In June, Casino took sole control of Brazil's largest retailer, ending a highly publicized struggle between the French company and local partner Abilio Diniz.
In France, where competition is fierce as retailers vie for market share amid stagnant demand, Casino has moved a step closer to becoming the sole owner of French inner-city store chain Monoprix.
Casino and Carrefour have faced increasing competition in recent months, as family-owned Groupe Auchan and the network of operator-owned E. Leclerc stores gained ground by slashing prices. Casino's focus on smaller convenience stores has allowed the company to post solid growth in its domestic market, while other retailers have suffered from consumers deserting the country's famed hypermarkets.
Two weeks ago, Carrefour posted a 2.1% decline in revenue in France over the second quarter, as the company's hypermarket format continued to struggle, though sales at Carrefour's supermarkets and convenience stores both increased on a like-for-like basis.
Casino shares have fallen around 9% in the past six months, performing slightly below its benchmark index France's SBF120, which has dropped around 7%. Shares closed at EUR62.36 Wednesday.
Write to Nadya Masidlover at nadya.masidlover@dowjones.com
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