PARIS — With things looking less than rosy on home turf, emerging markets remain the growth engine for Carrefour SA, the world’s second-largest retailer after Wal-Mart Stores Inc.
The group said 2011 operating income fell 19.2 percent to 2.18 billion euros, or $3.03 billion, impacted by underperforming hypermarket sales in France, which worsened in the fourth quarter, and a grim economic environment, notably in Southern Europe.
Net profits fell 14.3 percent to 371 million euros, or $516.6 million, from 433 million euros, or $602.9 million, a year ago.
“The results today are below our expectations,” said Lars Olofsson, Carrefour’s chairman and chief executive officer, who said it had been a “mixed year” for Carrefour in terms of numbers. “The environment has dramatically changed, and we need to adapt to that.”
Related Articles
Greece, “which is in severe recession mode,” was the group’s only loss-making market in 2011. The group’s net income was further impacted by very significant, largely noncash, one-off elements, notably an impairment charge for Italy.
You May Also Like
Fourth-quarter revenues fell 1 percent to 24.15 billion euros, or $32.58 billion, a decrease Carrefour attributed to a drop in discretionary spending in Europe and China.
Dollar figures are converted from euros at average exchange rates for the periods to which they refer.
Carrefour saw solid growth in Latin America, driven by Brazil, though Asia saw a “lack of sales momentum toward end of year,” Olofsson said. The group is focusing investment on Brazil, China and Indonesia. Brazil generated around 11 billion euros in sales, or $15.31 billion, making it the group’s second-biggest market.
Olofsson said this year the focus will be on developing e-commerce and consolidating the turnaround of hypermarkets.
In 2011, Carrefour rolled out 81 Carrefour Planet hypermarket concept stores across G5 countries. Despite “solidly” outperforming non-converted stores in terms of sales and traffic, “Planet did not deliver what we were hoping for, particularly in nonfood,” Olofsson said, adding the group plans this year to put conversions “on hold.” Only the 11 planned conversions for France, Spain and Belgium will go ahead. Planet represents 10 percent of group sales.
During Olofsson’s three-year tenure, the company has weathered weak results and a string of profit warnings as it tried to turn its ailing hypermarket business around. The executive is due to step down from his position in June. Georges Plassat, who will join Carrefour on April 2 as chief operating officer, will succeed him at the management helm following the group’s annual shareholders’ meeting on June 18. Plassat is currently ceo at French footwear and fashion retailer Vivarte SA.
LVMH Moët Hennessy Louis Vuitton and Blue Capital chief Bernard Arnault recently built up his stake in Carrefour. Blue Capital now controls about 16 percent of the share capital and 22 percent of the voting rights.