Carrefour shares rise after positive signs in home market
By Dominique Vidalon
PARIS (Reuters) - French retailer Carrefour SA (CARR.PA: Quote) said its home market was showing signs of improvement, reassuring investors that an action plan being implemented by new Chief Executive Georges Plassat is starting to bear fruit.
Plassat joined Carrefour in May with a brief to reverse years of underperformance in Carrefour's main European markets, where the hypermarkets in which it had heavily invested have been hit by competition from specialist stores and trends toward local and online shopping.
Shares in the world's second-largest retailer after U.S. group Wal-Mart Stores Inc (WMT.N: Quote) were up 4.4 percent at 16.70 euros by 0858 GMT, the top riser on the CAC 40 index of French blue-chip stocks .FCHI.
"After a positive surprise in the first half and another ... in the third quarter, confidence could quietly return in the new management's ability to put things back on track," analysts at brokerage Aurel BGC said in a note.
Plassat, who has a record of company restructuring and whose reputation as a cost-cutter earned him the nickname of "Le Nettoyeur" (cleaner), took over from retiring Lars Olofsson and is trying to around the company's fortunes.
He said in August he would slash costs and defend key markets like France, Brazil and China, but has so far provided little detail on his turnaround plan.
Carrefour's third-quarter statement showed sales up 0.2 percent on a like-for-like basis at 22.63 billion euros ($29.2 billion), above an average forecast of 22.57 billion in a Reuters poll of seven banks and brokerages, as robust demand in Latin America made up for weakness in austerity-hit Spain and Italy.
Revenue in France stripping out fuel declined 1.5 percent, an improvement from a 3.3 percent drop in the second quarter and indicating initiatives such as offering cash-strapped shoppers lasting price cuts, introduced last year and strengthened by Plassat, are starting to have an impact. Continued...