Retailer Casino slashed its 2023 earnings outlook for France, saying investments required to fund price cuts to boost customer traffic and volumes in its supermarkets and hypermarkets would weigh on profits.
Casino said in a trading update for France that it now expected full-year EBITDA (earnings before interest, tax, depreciation and amortisation) after lease payments to be €100 million ($105.4 million) instead of the €214 million forecast in July.
Third-Quarter Performance
French retail sales fell 5.6% in the third quarter year on year on a same store basis, reflecting an 18.6% fall in hypermarket sales and an 11.5% fall in supermarket sales.
Sales at Monoprix remained stable on a same-store basis during the quarter, with the food segment seeing an increase of 1.6% and non-food registering a 3.8% decline.
It was mainly impacted by unfavourable weather conditions that weighed on sales in the clothing segment and on customer traffic, Casino added.
Elsewhere, Franprix reported same-store sales growth of 2.2% for the quarter, with a sequential slowdown due to a difficult comparable period and a summer impacted by riots in early July and unfavourable weather.
It saw double-digit growth in e-commerce and continued its expansion strategy. Twenty-two new stores opened during the quarter, taking the total number of stores openings since the beginning of the year to 98.
Debt Restructuring
Casino announced this month the finalisation of a deal to avert bankruptcy through a debt restructuring agreed with its main creditors, led by Czech billionaire Daniel Kretinsky.
The deal involves a massive dilution for shareholders and will mark the end of a 30-year-reign for chief executive Jean-Charles Naouri, who controls the company via his Rallye holding.
Casino announced on Wednesday evening that a commercial court had agreed the start of an accelerated safeguard procedure allowing the group to implement the debt restructuring plan.
Article by Reuters, additional reporting by ESM.
