EVRY (dpa-AFX) - French grocery retailer Carrefour Group (CRERF.PK, CRRFY.PK), Thursday reported a 51 percent drop in profit for the first half of fiscal year 2014, hurt mostly by weak sales in emerging markets, muted growth in Europe, and poor margins, while the prior year recorded one-time gains.
Recurring operating earnings, however, climbed from a year ago, helped mainly by growth in France, where Carrefour saw improved gross margins and cost savings from logistics.
The results comes with investors concerned over margins at Carrefour, at a time when rivals up the ante with price cuts in the domestic market. Carrefour seeks to counter the competition with store remodels and improved logistics.
Carrefour shares dropped about 5 percent at the close of markets in Paris.
For the first half of 2014, Carrefour reported net earnings of 441 million euros, compared with 902 million euros last year.
Results for the 2014 period included a loss of 33 million from discontinued operations, compared with a gain of 368 million euros in the prior year.
Excluding items, adjusted earnings climbed 16.7 percent to 274 million euros from 235 million euros a year ago.
Net sales for the first half of 2014 edged down 1.6 percent to 35.9 billion euros from 36.4 billion euros a year ago. Sales in France rose 0.3 percent, while emerging markets, comprising Latin America and Asia, slid 6.1 percent.
Results were somewhat hurt by operating margin that slid to 3.1 percent from 3.5 percent.
But on a recurring basis, operating income climbed to 2.3 percent from 2.1 percent.
Recurring operating profit climbed 7.9 percent to 833 million euros.
The company gained from traffic in all formats in Europe. In France, recurring operating income was up 6.9 percent. Also there was overall stability in sales with growth in Spain, Belgium and Romania.
Recurring operating profit also improved in emerging markets, led by robust growth in Brazil and Argentina, and stable sales in Asia.
In June, Carrefour acquired DIA France, comprising 800 stores with annual sales of 2.3 billion euros. The retailer also purchased 53 supermarkets in northern Italy.
In Paris, Carrefour stock closed Thursday at 25.83 euros, down 1.30 euros or 4.77%, on a volume of 4.6 million shares.
Copyright RTT News/dpa-AFX