Carrefour confident for rest of year as Brazil drags down H1 profit

PARIS (Reuters) -Carrefour is looking to the second half of the year with confidence and upholds its 2023 financial goals, Europe's largest food retailer said on Wednesday, as it reported strong first-half sales and profit growth in its core French market.

Group recurring operating income however declined 2.2% to 700 million euros ($774.6 million) at constant exchange rates, dragged down by costs tied to the integration of Grupo BIG in Brazil, Carrefour's second-largest market.

"Carrefour remains fully confident in its second-half performance, and confirms its full-year objectives of growth in EBITDA, recurring operating income and net free cash flow," Chairman and CEO Alexandre Bompard said in a statement.

Carrefour has vowed to step up its expansion in e-commerce, open more discount stores and cut costs as part of Bompard's plan to speed the group's turnaround to 2026 amid soaring inflation made worse by the Ukraine conflict.

First-half sales grew 11.2% on a like-for-like basis to 45.45 billion euros, driven notably by a solid performance in France, where Carrefour hypermarkets' low-cost offering attracted buyers grappling with the cost of living.

Carrefour also said it benefited from its focus on its own-label goods, which now make up over 35% of food sales.

In France alone, operating profit jumped 39% to 270 million euros on sales that rose 7.2% on a like-for-like basis.

With net free cash flow rising by 196 million euros to 1.684 billion euros in the first half, Carrefour said it was pushing on with its 800 million euro share buyback plan, with 200 million euros completed to date.

($1 = 0.9037 euros)

(Reporting by Dominique Vidalon; Editing by Tassilo Hummel and Jan Harvey)

By Dominique Vidalon