Colruyt held its FY profit target despite H1 earnings fall

Colruyt held its FY profit target despite H1 earnings fall

Belgium-based retailer Colruyt has maintained its target for full-year profits despite a drop in half-year earnings.

Colruyt yesterday (28 November) reported a 7.6% decrease in net profit to EUR158.7m (US$12m) for the six months to the end of September. The retailer's earnings per share of EUR1 failed to meet an analyst target of EUR1.08, according to data compiled by Bloomberg.

Operating profit fell 6.5% to EUR228.6m, with Colruyt pointing to higher operational costs.

Nevertheless, the retailer kept to a forecast it issued in September, when it said it expected its annual net profit to "approach" last year's level. However, Colruyt did admit that hitting that target "remains a challenge in the current market climate".

Colruyt said its operations in France, where it has 57 stores, had made a loss in the first half of its financial year after investment in price and an accelerated programme of store expansion.

The group's gross profit increased 6.6% to EUR959.4m but the company said its margin was lower due to pressure on its retail prices and the higher cost of meat, fruit and vegetables.

The retailer booked a 7.7% increase in revenue to EUR3.83bn on the back of new stores and its increased market share in Belgium, which it said rose by 50 basis points to 24.86%.

However, Colruyt said a "less favourable" summer, combined with "intensified" competition hit revenue growth in the second quarter. In the first three months of its financial year, Colruyt saw revenue increase 8.9%.

Click here for the complete statement from Colruyt