Carrefour posted its first quarterly sales increase in six quarters last week, despite a negative impact of 5.1 per cent related to exchange rates.
Turnover for the first six months of the year grew by 6.4 per cent to €37.4 billion, but growth was reduced to a more modest 1.3 per cent when taking into account the currency impact from eastern European, Latin American and Asian operations.
For the second quarter of the year, sales were up 2.9 per cent to €19.1 billion after currency translation, a major improvement from the first quarter when sales declined by 0.4 per cent.
The company welcomed the first positive quarterly result for some time, although it was boosted by the late date of Easter this year, which fell in Q2 rather than Q1 as in 2002.
Sales in the group's five leading European markets (France, Spain, Italy, Belgium and Greece) grew by 5.4 per cent during the second quarter and accounted for 82 per cent of total turnover.
Sales in France were up 3.0 per cent to €9.8 billion during the quarter and by 2.9 per cent to €19.2 billion for the half, driven by good performances from both food and non-food operations.
Sales at the Champion supermarket unit were driven by the rapid expansion of the chain during both the quarter and the half, and the company said that it expected further gains as up to 70 stores were refitted in the next few months.
In the rest of Europe, Q2 sales increased by 9.4 per cent, including the impact of currency translation, to €6.9 billion. Sales for the half, again after currency translation, were up 8.4 per cent to €13.3 billion. Hypermarket sales in Spain and Belgium were particularly good (up 7.9 and 3.3 per cent on a like-for-like basis respectively).
Latin American sales rose 11.2 per cent during the quarter to €1.4 billion, while first half sales increased 12.7 per cent to €2.6 billion, helped by good like-for-like sales and by rapid store expansion. But a negative impact of exchange rates of 28.6 per cent and 39.3 per cent respectively meant that reported sales in euros were down 17.5 per cent for the quarter and 26.5 per cent for the half.
The Brazilian performance was particularly good during the second quarter, Carrefour said, with hypermarket sales growth there in single figures and like-for-like sales at supermarkets and hard discount outlets in double figures. Total Brazilian sales rose 13.1 per cent on a constant basis to €755 million, while Argentine turnover declined 0.4 per cent to €325 million.
With positive like-for-like sales growth in Brazil, the company is well placed to profit from its operations in Latin America once the exchange rate situation stabilises. Carrefour noted that there was a significant improvement in the currency impact between the first quarter (-48 per cent) and the second (-28.6 per cent) - a sign that worst is now over?
Asian sales were up 13.3 per cent on a constant basis during the second quarter to €1.1 billion, rising by 12.3 per cent to €2.4 billion for the half. Chinese sales were impacted by the SARS outbreak during the quarter, rising just 2.7 per cent compared to 30 per cent in the previous three months, while Taiwanese sales continued their steady decline.
However, there was some good news with a return to growth in Korea (on a constant currency basis) as Carrefour's new stores there began to contribute to sales.