Carrefour reports a loss and warns on full-year profits
- 31 August 2011
- From the section Business
Carrefour reported an unexpected loss in the first half of the year and gave a profit warning for the full year.
Europe's biggest retailer said it made a net loss of 249m euros ($360m; £221m) for the first six months of the year, compared with a 97m-euro profit in the same period last year.
It took 884m euros of one-off charges, mainly due to reductions in the value of its Italian business.
The company said the economic climate was "increasingly challenging".
Carrefour warned that its full-year profit would be 15% down on last year's level, as it had been forced to cut prices to maintain market share.
"We have taken the decision to favour sustainable value creation over short-term gains," chief executive Lars Olofsson said.
The company conceded that it had made mistakes such as raising prices above the levels of rivals such as E Leclerc and Intermarche.
Earnings in Carrefour's core French market fell 40%. It blamed this on a reorganisation of its systems, which led to inventory shortages, as well as rising prices of raw materials.