The largest retailer in France – Carrefour SA, announced that its 2013 earnings rose, while also revealing plans to increase spending in 2014.
Over the last few years Carrefour SA was facing difficulties with its slumping business, which experienced prices going up-and-down, as well as heavy costs. As reported by Bloomberg, the company said in its statement: “Carrefour is staying the course in a low-growth environment, marked by currency volatility.”
However, Carrefour SA reported that its 2013 net profit rose more than six times from 150 million euros in 2012 to 494 million euros (1.30 billion dollars). The operating profit of the company increased by 5.4% to 2.24 billion euros (3.08 billion dollars). Carrefour also revealed that its sales excluding taxes fell by 1.0% and amounted to 74.89 billion euros.
Pierre-Jean Sivignon, who is the Chief Financial Officer of the company, said in a conference call, which was cited by the Wall Street Journal: “Carrefour recorded strong growth in a difficult environment. We will relaunch our expansion beyond the countries of China and Brazil. The group continues to invest in its future and its growth.”
The company joined a group of institutional investors in order to make the acquisitions of 127 shopping malls in Europe from Klepierre SA possible in December last year. This provided Carrefour with better control over the areas around its hypermarkets. The company also explained today that it believes that creating a shopping mall company will help it make its sites located in France, Spain and Italy more attractive for local customers.
One of the analysts working for Sanford C. Bernstein – Mr. Bruno Monteyne said in an e-mailed statement, which was cited by Bloomberg: “Good results don’t necessarily mean good news for the stock, as expectations are very high. Many people were expecting a continued much higher level of improvement in French profit as a proportion of sales.”
Carrefour SA rose by 1.24% in Paris by 10:06 GMT to trade at 26.99 eruos, marking a one-year change of +27.10%. The company is valued at 19.30 billion euros. According to the Financial Times, the 26 analysts offering 12-month price targets for Carrefour SA have a median target of 29.00 euros, with a high estimate of 32.50 euros and a low estimate of 19.90 euros. The median estimate represents an 8.78% increase from the previous close of of 26.66.
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