U.S. News

Carrefour Says Profit Up 3.3% in 2006


Carrefour, Europe's biggest retailer, posted a 3.3% rise in 2006 net profit Thursday, with a weaker performance in its home market in France dampening robust growth elsewhere.

The earnings report came the day after the chairman of Carrefour's supervisory board resigned in a shake-up. Luc Vandevelde's departure came as two new investors moved in with a nearly 10 percent stake in the struggling retail giant.

The company said in a statement Thursday that net profit from recurring operations for 2006 was 1.86 billion euros ($2.44 billion), compared with 1.8 billion euros a year earlier. The results were roughly in line with analysts' expectations.

Operating profit for the year rose 3.4% to 3.26 billion euros ($4.28 billion) compared with 3.15 billion euros in 2005.

The company said it expects 2007 sales growth to be at least as strong as last year.

Carrefour's 2006 dividend will be 1.03 euros ($1.35) per share, the company said.

Carrefour, the world's biggest retailer after U.S.-based Wal-Mart Stores, in January posted a 6.6 percent rise in 2006 revenues to 77.9 billion euros ($102.32 billion) after 73.06 billion euros in 2005.

Analysts were disappointed in January by its fourth-quarter sales performance, which showed a 1.5% drop in like-for-like sales, concerned Carrefour had lost ground to other retail competitors in its key European markets.

Shares closed at 52.80 euros ($69.35) on Wednesday amid the boardroom shake-up and intensifying speculation that Carrefour is a takeover target.

Vandevelde was replaced by Robert Halley of the Halley family, Carrefour's largest shareholder. Vandevelde had been under pressure from the family since breaking with its investment group last month.

The resignation was announced after Colony Capital and Groupe Arnault - French billionaire Bernard Arnault's investment vehicle - said they had taken 9.8% of Carrefour. Colony Capital is a U.S. private equity fund known for its role in the recovery of hotel group Accor.