PARIS (AFP) - French retail giant Carrefour warned that 2004 results would not meet its targets, as it reported weaker-than-expected sales for the third quarter.
Carrefour, the world's second-largest retailer by sales after US rival Wal-Mart Stores, reported third-quarter sales of 20.314 billion euros (25.015 billion dollars), below analyst expectations that had already been reduced ahead of Tuesday's report.
Sales rose 4.2 percent on like-for-like comparisons in the third quarter, compared with estimates of 20.413-20.594 billion euros, according to analysts polled by AFX News, the financial news service of AFP.
On a reported basis, sales were up 2.9 percent in the quarter.
"Since we reported our results at the beginning of September, the market in France -- as well as in most other European countries -- has deteriorated sharply," Carrefour said.
"Volumes are down significantly, and we see industry-wide deflation in food as well as non-food. We have contributed to this deflation more than our competitors," the company said, adding that the macroeconomic environment is "worsening".
As a result, Carrefour now saw 2004 sales growth below five percent like-for-like, against a previous forecast of about five percent, while full-year earnings per share (EPS) would not post double-digit percent growth as announced.
"We expect nonetheless to grow EPS this year," the Paris-based company said.
The warning was issued after the French stock market had closed.
Analysts had widely anticipated the profit warning, in light of recent industry studies revealing declines for both hypermarket and supermarket sales for Carrefour.
The retailer said it had invested 229 million euros to finance lower product prices in the first nine months of this year, and the group planned to accelerate investments in order to cut the retail cost of products in the fourth quarter.
Third-quarter sales in France were flat at 9.99 billion euros, while sales in Europe excluding France were up 5.8 percent like-for-like at 7.459 billion euros.
Asian sales were up 19 percent like-for-like to 1.464 billion euros, or 9.9 percent on a reported basis.
In Latin America, sales rose 11.6 percent like-for-like to 1.4 billion euros, but increased just 2.2 percent on a reported basis that excludes the impact of the euro's strength against other currencies.
By division, the group's core hypermarket sales in France fell 2.6 percent to 5.092 billion euros, while French supermarket sales rose 5.8 percent to 2.099 billion.
Deep discount sales in France were up 13.9 percent at 554 million.