Carrefour SA, the world’s second-largest retailer, said yesterday it incurred a 58 million euro (US$82.75 million) loss in the first half, hit by a one-off charge writing down the value of Italian assets and as recession-shy shoppers cut back on spending.
The company, second only to US-based Wal-Mart among the world’s biggest retailers, said that it made the net loss in the six months through June this year, compared with a net profit of 744 million euros a year earlier.
Revenue fell 1.6 percent in the first half to 41.27 billion euros.
New CEO Lars Olofsson, appointed last year to improve performance, said Carrefour is operating in a “challenging environment,” but that sales were “resilient” and that the company was on track to meet its targets for this year.
Carrefour is targeting full-year operating profit of up to 2.8 billion euros “if current sales trends continue.”
In the first half, operating profit — what Carrefour calls “activity contribution” — fell 28 percent to 1 billion euros.
Results from last month and this month showed “no change” in the economic environment, chief financial officer Pierre Bouchut said on a conference call.
In the first half, Carrefour said it gained market share in France, which accounts for about 40 percent of sales, even through revenue fell by 3.6 percent there.
The retailer plans to spend 600 million euros this year on promotions and other discounting to build market share.
Olofsson has said that his priority is to improve performance in France, where it launched a new low-cost range of products called “Carrefour Discount” this year.
Carrefour booked 511 million euros in charges in the first half, including 60 million euros in restructuring charges and a 400 million euros impairment charge after adjusting for the market value of Italian company Finiper, in which Carrefour owns a 20 percent stake and may be forced to buy under a put option.
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