Shares in French retailer Carrefour this week dipped to their lowest level in more than two years, as its plan to expand in Brazil crumbled and slow sales in France led to a first-half fall in profit, according to Bloomberg.
The move to merge Carrefour's Brazilian assets with local retailer Cia Brasileira de Distribuicao Grupo Pao de Acucar was scuppered this week by Brazil’s national development bank, BNDES, which refused to offer funding.
According to Carrefour, operating profit for the first half of the year fell by about 23 per cent, while shares slumped by as much as 66 cents, or 3 per cent, to €21.33, the lowest level since March 2009.
Despite poor domestic sales, the retailer revealed that second-quarter revenue had risen by 1.6 per cent to €22.4bn, thanks to a strong performance in emerging markets in Latin America (11 per cent increase in revenue) and Asia (5.3 per cent increase).
CEO Lars Olofsson commented: “In spite of a persistently challenging environment, Carrefour was able to generate sales growth in the first half, once again driven by a strong performance in emerging markets. In France, robust like-for-like sales in supermarkets and convenience formats allowed us only partly to offset a disappointing performance in hypermarkets.
'Carrefour is devising and implementing an action plan with the objective of attaining the group’s 2011 target of a progression in sales and current operating income. In addition to France, all of our teams are now being mobilised to support this goal.”
