Casino Guichard-Perrachon SA, the French retailer being targeted by short seller Carson Block, reported a 35 per cent drop in full-year earnings as Brazil’s economic slump curbed sales in the country.
Trading profit declined to €1.45 billion ($1.6 billion), Saint-Etienne, France-based Casino said Wednesday in a statement. Analysts predicted €1.51 billion, according to the average of 18 estimates compiled by Bloomberg.
Casino is selling assets in Asia and Latin America to cut debt, while focusing on price and convenience in its largest market, France, as it competes for growth amid weak consumer spending. The company in February agreed to sell its stake in Thailand’s Big C Supercenter Plc for €3.1 billion and has said it expects margins to improve this year.
Carson Block’s Muddy Waters began its attack last year, contending that Casino is using financial engineering to mask a sharply deteriorating core business and that shareholder Rallye has too much debt, allegations Casino dismissed. Block took aim again on Tuesday, saying Casino inflated 2014 earnings after a surge in the stock erased most of the decline since he disclosed his position.
Total revenue reached €46.1 billion last year, boosted by a recovery in France, the grocer said in January.
Casino reiterated the financial targets for its French operations. It’s aiming for €900 million of profit before interest, tax, depreciation and amortization in its home market this year, with a trading profit of €500 million.
News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.
