Retailer Carrefour confident as Q1 sales growth accelerates

© Reuters. FILE PHOTO: A seagul flies over the logo of Carrefour at a Carrefour Hypermarket store in Nice, France, February 17, 2021. REUTERS/Eric Gaillard

By Dominique Vidalon

PARIS (Reuters) -Carrefour, Europe's largest food retailer, said on Tuesday it was confident of more profit and cash flow growth this year despite high inflation, after sales growth accelerated in the first quarter.

Sales reached 22.071 billion euros ($24.24 billion), marking like-for-like growth of 12.3% and an acceleration from 10.9% sales growth in the fourth quarter of 2022.

This was driven by a solid performance in France, where Carrefour (EPA:CARR) hypermarkets' low-cost offering attracted buyers grappling with the cost of living.

Asked to comment on French Finance Minister Bruno Le Maire's call in recent days for retailers and suppliers to re-open price negotiations in order to pass on lower wholesale prices to consumers, Finance Chief Matthieu Malige told analysts: "The last time suppliers sent their tariffs was in December, some costs, such as that of energy, have since decreased. We will try to reflect that the upcoming round of negotiations,"

Carrefour confirmed its financial targets for 2023, which are for further growth across its main three indicators - earnings before interest, taxes, depreciation and amortisation (EBITDA), recurring operating income and net free cash flow.

"In a context of very high food inflation in most of its markets, Carrefour is staying the course and maintaining strong commercial momentum, with steady market share performance in all its key countries," Chairman and CEO Alexandre Bompard said in a statement.

As inflation drives shoppers to trade down, Carrefour said it benefited from its focus on private labels, which make up 35% of sales, as well as promotions and accelerated expansion of discount stores and cost savings.

In the company's core French market, hypermarket sales rose 6% in the first quarter of 2023 compared with a 3.7% rise in the fourth quarter of 2022.

In Brazil, the group's second-largest market, the integration of the acquisition of Grupo BIG continued at a steady pace with 23 additional store conversions in the first quarter. All conversions will be completed in the second quarter, six months earlier than planned, it said.

Carrefour also said it had initiated its 800 million euros share buyback plan, with 200 million euros completed to date.

($1 = 0.9103 euros)