Carrefour, the world’s second-largest food retailer, today (28 August) stuck to its forecast of an up to 18% fall in annual profits after seeing half-year earnings slump.
The French retail giant is investing heavily in price promotions and the launch of a discount, own-label range as it looks to shed its image as an expensive retailer.
For the six months to the end of June, operating profit tumbled 28% to EUR1.01bn (US$1.45bn) and Carrefour said annual operating profit would reach EUR2.7-2.8bn – equating to a fall of up to 18%.
Impairment and restructuring charges hit Carrefour’s bottom line during the first half of the year.
The company made a net loss of EUR58m due to a EUR400m impairment charge for its Finiper business in Italy, EUR60m of restructuring costs and some EUR17m in “rebranding and integration costs”.
Neverthless, Carrefour CEO Lars Olofsson insisted the retailer had put in a “resilient” performance.
Turnover fell 1.6% to EUR41.28bn but underlying sales – excluding fuel and adjusted for calendar effects – were up 1.9%.
“In a challenging environment, Carrefour posted resilient first-half sales and market-share gains, notably in France, highlighting the successful acceleration of our brand convergence programme and the relevance of our multi-format model,” Olofsson said.
Click here for the full first-half release from Carrefour and check back this afternoon for further comment from the retailer.