PARIS—French retailer Casino Guichard-Perrachon SA on Thursday reported a drop in sales for the third quarter, hit by a sharp decline in its Latin American nonfood retail business.
The company said sales for the three months ended Sept. 30 dropped 11% to €10.7 billion ($12.28 billion) from a year earlier. Analysts polled by FactSet had expected the company to report sales of €10.6 billion.
The drop in sales shows the extent to which the slowdown in Brazil is becoming a burden for the company. The group makes around 40% of its sales in Latin America and with Brazil suffering from a prolonged recession, sales in Casino’s nonfood business in Latin America are down 44% on last year. The sharp deterioration in the real is also hitting sales numbers when converted to euros.
Activity in France meanwhile rebounded after several slow years, with sales up 1.7% to €4.8 billion, boosted by improvements across all store formats, the company said. That improvement sent shares in Casino up 7% on Thursday morning.
Casino’s exposure to emerging markets—where the retailer makes the majority of its sales—has boosted its sales for years but a slowdown in markets like Brazil and the August bombings in Thailand weighed on the performance this time round.
On a call with reporters, Casino CFO Antoine Giscard d’Estaing said the group remains committed to Brazil but would need to “adapt,” particularly in the non-food sector. “Activity in that part of the business is down 20% or 25% so we need to lower costs,” he said.
In Asia, Casino saw its sales fall 2.9% on a like-for-like basis as its stores in Bangkok and other tourist areas reported slumping sales in the wake of the summer bombings.
Bryan Garnier analysts said it was possible to regard the glass as either “half full” by looking at France or “half empty” by looking at Casino’s international business, adding that they struggled to see what could give decisive impetus to the company’s performance in the short term.
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