Carrefour’s recovery is on the uptake, because growth in its French home market has given the world’s second largest retailer a 5.3 % operational profit increase. That trumps any prediction made by analysts.
French growth helped improve margin
Excluding exchange rates, Carrefour managed a 2 % turnover increase in the past fiscal year. Unfortunately for the company, the exchange rates were a negative influence, meaning it had to accept a 1 % turnover drop to 74.9 billion euro.
The exchange rates had a similar effect on the distribution giant’s profit, because the operational profit would have increased 9.8 % at stable rates, rather than ‘only’ growing 5.3 % to 2.24 billion euro, which is still above analyst expectations of – on average – 2.2 billion euro.
Carrefour's performance on its home market France was remarkable, because it had an (adjusted) 1 % turnover increase and a 3.4 % operational margin increase thanks to CEO Georges Plassat’s new strategy. The group’s margin also grew from 2.6 % to 3 %.
Steady in weak market
Despite extremely volatile exchange rates and an area of low growth, Carrefour has managed to keep a steady course, Plassat said. The group gets 73 % of its turnover out of Europe, but the weak economic climate there dragged the results down, with especially Spain and Italy contributing to a 2.8 % organic turnover drop. Belgian net sales grew 1.4 %, to 3.968 million euro in 2013.
Carrefour will be focusing on its core markets (Europe, Latin America, China) for 2014 and will invest 2.5 billion euro into store transformations and expanding several group formulas.