Carrefour 2011 net profit slumps to 371M euros

PARIS—Carrefour, the world’s second-biggest retailer, said on Thursday that its 2011 profit dropped by 14.3 percent, closing a year marked by multiple profit warnings and a pending management change.

The group said it would scale back the planned European openings of new Planet hypermarkets, a concept that has turned in disappointing results so far.

Carrefour’s 2011 net profit came in at 371 million euros ($488 million), according to a statement which also said the group would divide its dividend in half to 0.52 euros per share.

Second only to the US group Walmart, Carrefour said it had suffered a net loss of 2.2 billion euros in ongoing activities, which take into account the spin-off of its hard discount unit Dia and the sale of activities in Thailand.

Operating profit fell by 19.2 percent to 2.18 billion euros, slightly worse than an average analyst forecast of a 19 percent drop.

Outgoing Carrefour chairman and chief executive Lars Olofsson pointed to “the tough environment we faced throughout the year, notably in Southern Europe, and the underperformance of French hypermarkets” as key factors behind the results.

He noted, however, that the group “is ahead of its cumulative cost-cutting target” and that that this year it would exercise “strict cost and cash discipline to adjust to the environment in which we are operating.”

Olofsson, who is to resign in June, is being progressively replaced by Georges Plassat, who will be the group’s third chief executive in four years.

Carrefour said it would put the roll-out of its Planet concept on hold across Europe, once 11 large stores had been transformed.