Casino's first quarter sales growth accelerates, boosted by food demand in France
Thursday 23rd April 2020
PARIS (Reuters) - Retailer Casino (CASP.PA), battling investor concerns over its high debt, said revenue growth accelerated in the first quarter, reflecting strong food sales in its core French market amid the coronavirus epidemic, and a robust performance in Brazil.
Casino, which last month suspended its financial guidance for 2020 due to uncertainties tied to the coronavirus pandemic, said the lockdown in place in France since March 17 led to "unprecedented" food demand, notably at its convenience stores and in e-commerce.
Finance Chief David Lubek told analysts he expected the trend to continue even as France exits lockdown from May 11.
"It's likely demand for food retail will remain at high levels," he said.
Casino, which has been selling assets to reduce its debt and which also controls Brazil's Grupo Pao de Acucar (PCAR4.SA), posted first-quarter sales of 8.294 billion euros ($8.97 billion).
On a same-store basis and excluding acquisitions, currency effects and revenue on fuel, sales rose by 6.4% compared to 1.6%growth in the fourth quarter of 2019.
In France, total sales for the quarter came to 3.885 billion euros, an increase of 5.8% on a same-store basis.
City centre convenience stores and E-commerce have been in particularly high demand since the lockdown started, with sales rising 3.6% at Monoprix and 12.6% at Franprix.
Meanwhile Geant Hypermarkets sales grew by a more modest 1.5% on a same-store basis, of which 2.9% was in food.
The environment has been more challenging in France for large hypermarkets since the lockdown as shoppers have favoured small stores and online.
Geant Casino hypermarkets have, however, developed a home delivery solution in around 41 cities and established a partnership with Uber Eats, the group said.
Casino's e-commerce business recorded same-store growth of 43% for the quarter, and a threefold increase in activity over the last four weeks, particularly led by home delivery, Drive and click & collect.
Casino CEO and controlling shareholder Jean-Charles Naouri has been hunting for ways to ease the company's debts - and those of parent company Rallye (GENC.PA), which was placed under protection from creditors in May 2019 - through asset sales and refinancing efforts.
In March, Casino agreed to sell 567 Leader Price stores in France, plus three warehouses, to German discount rival Aldi in a deal with an enterprise value of 735 million euros.
Preparatory work for the closing has been initiated and is ongoing, the group said.