Carrefour Brasil has posted a net profit of 39 million reais (€7.1 million) in the first quarter of its financial year.
The quarterly performance, driven by food inflation, also marks a return to profit for Carrefour Brasil.
Adjusted net profit for the quarter amounted to 52 million reais (€9.5 million), which was below the forecast of 137.4 million reais (€25.1 million) from analysts polled by LSEG, according to Reuters.
Sales at the retailer increased 2.5% year-on-year during the quarter, with hybrid wholesale unit Atacadão witnessing growth of 6.6%. The unit accounts for nearly 70% of Carrefour Brasil's activities.
Food Inflation
"We have seen a recovery of food inflation to positive levels, which obviously had positive effects on our prices and volumes," Carrefour Brasil chief executive Stephane Maquaire told journalists according to a Reuters report.
According to Maquaire, recent food inflation trends triggered improved sales by Atacadão to corporate customers, mainly smaller grocery stores, which had reduced their purchases due to financial pressures from lower margins.
He added that merchants have been recovering their dynamics of buying to replenish stocks.
The retail segment in Carrefour Brasil reported a more than 10% decline in sales in the quarter as it implemented lower prices for some basic products to increase unit performance.
Quarterly Highlights
Consolidated adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 36.6% to 1.42 billion reais (€260 million), during the quarter, above analysts' forecast of 1.33 billion reais (€240 million), Reuters reported.
Adjusted EBITDA margins rose to 5.7% from 4.3% in the first quarter of 2023.
Maquaire added that the company temporarily closed seven stores of almost 100 owned in Brazil's southernmost state of Rio Grande do Sul, due to recent floods following heavy rains.
