Retailer Casino's sales growth impacted by signs of weakness in France and Brazil
By Dominique Vidalon
PARIS, April 18 (Reuters) - Retailer Casino kept its full-year profit growth goals on Tuesday, although first-quarter sales growth slowed down due to signs of weakness at the Geant Casino hypermarkets in France, while lower inflation impacted its Brazilian business.
The French group added it was under no pressure to sell a controlling stake in Brazilian business Via Varejo although it declined to provide a timetable for the sale.
"The Brazilian climate is favourable. We have no pressure on this asset, whose intrinsic value can only improve," chief financial officer Antoine Giscard d'Estaing told reporters.
For 2017, Casino reiterated its prediction for growth of at least 10 percent in group operating profit at current exchange rates, having achieved a 3.7 percent rise in 2016.
Casino, whose credit rating was cut to junk by Standard & Poor's in March 2016 and which has been criticised by U.S. activist fund Muddy Waters, is under pressure to show it can revive profits in France as conditions in Brazil remain tough.
Casino, which also controls Brazil's Grupo Pao de Acucar , posted first-quarter sales of 9.321 billion euros ($9.92 billion). Shares in the company, which have risen around 13 percent so far in 2017, dipped by 0.7 percent.
Excluding acquisitions, currency effects and revenue on fuel, sales rose by 3.1 percent, a slowdown from 5.1 percent growth in the fourth quarter of 2016.
Casino has cut prices at home at its Geant hypermarkets and reduced retail space for non-food items in response to competition from online and smaller convenience stores, while it has also increased its focus on organic and fresh food ranges.
However, same-store sales at the Geant Casino hypermarkets in France fell 1.9 percent after rising 0.6 percent in the fourth quarter of 2016, although the group's Monoprix, Franprix and Casino-branded stores posted more robust performances.
In recession-hit Brazil, its second-biggest market by revenue, food retail sales slowed to 9.8 percent, reflecting the impact of a sharp fall in inflation and the closure of 20 stores during the quarter. Lower inflation can result in consumers delaying purchases in order to wait for even cheaper prices.
Giscard d'Estaing reiterated that for 2017, Casino still aimed to grow operating profit at its food retail operations in France by 15 percent. He also eyed a contribution from Casino's property development operations of 60 million euros, compared to 87 million in 2016.
($1 = 0.9396 euros) (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)