Bloomberg News

Carrefour Cuts Annual Forecast Again as Sales Slump in Europe

October 13, 2011

Oct. 13 (Bloomberg) -- Carrefour SA, the world’s second- largest retailer, cut its 2011 profit forecast for the second time in three months, saying it now expects a decline of as much as 20 percent amid a slump in Europe.

“Faced with an increasingly uncertain environment, we are, as a matter of prudence, broadening the range of our 2011 current operating income guidance to a decline of 15 percent to 20 percent,” Chief Executive Officer Lars Olofsson said today in a statement. The Boulogne-Billancourt, France-based company forecast in August a 15 percent drop in profit from restated 2010 figures.

Third-quarter sales totaled 22.8 billion euros ($31.5 billion), Carrefour said. That compares with the 22.9 billion- euro average of 22 analyst estimates compiled by Bloomberg.

“Macro conditions seem to be getting more difficult” in France, Spain, Italy and Greece, which account for 62 percent of Carrefour sales, Royal Bank of Scotland Group Plc analysts, including Justin Scarborough in London, wrote in an Oct. 7 report. The analysts, who have a “hold” recommendation on Carrefour’s shares, expect profit to fall 17 percent in 2011.

Risks to Europe’s economic outlook have increased as governments struggle to contain the sovereign-debt crisis, the European Commission said this week. France may enter a recession next year, Goldman Sachs Group Inc. predicted Oct. 3, as growth in the euro-area economy slows to 0.1 percent.

Carrefour is adjusting prices and remodeling its largest stores in a bid to revive earnings as competition intensifies in France, its largest market. Today’s revision marked the fifth time in the past year the grocer has predicted lower profit.

--Editor: Tom Lavell

To contact the reporter on this story: Andrew Roberts in Paris at

To contact the editor responsible for this story: Celeste Perri at

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