Carrefour Battles Tough European Market

By Ruth Bender And Nadya Masidlover 

PARIS--French retailer Carrefour SA said Thursday that it continued to gain ground in its efforts to kick-start growth despite difficult business conditions in Europe as it reported an increase in full-year operating profit.

The company said operating profit rose 6.7% to EUR2.57 billion ($2.84 billion) as the company cut costs as part of a three-year turnaround plan.

Net profit fell slightly to EUR1.25 billion from EUR1.26 billion a year earlier, when the company booked a gain from the sale of its Indonesian business. Sales fell 0.5% to EUR76.32 billion as growth in Latin America couldn't offset still lackluster growth in Europe and France.

The release highlights Carrefour's attempted recovery since the arrival of Chief Executive Georges Plassat in 2012, in line with his pledge to get the company back on track within three years.

"Our plan and our good cost control are bearing fruits," said Chief Financial Officer Pierre-Jean Sivignon.

Mr. Plassat was brought in to head the retailer's turnaround after several years of declining sales and strategic missteps by his predecessors. In his first year, the boss slashed the company's global footprint, pulling out of a number of markets.

At home in France, Mr. Plassat concentrated efforts on the company's price image, cutting back on promotions and focusing on everyday low prices. Meanwhile, the retailer continued to invest in revamping stores in Europe and opening stores in emerging markets.

Carrefour said in 2015 it will continue to focus on implementing its different action plans with total investments to reach between EUR2.5 billion and EUR2.6 billion.

The company said it would pay a dividend of EUR0.68 per share, up from EUR0.62 last year.

Write to Ruth Bender at [e-mail] and Nadya Masidlover at [e-mail]

Access Investor Kit for Carrefour SA

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0000120172

Access Investor Kit for Carrefour SA

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US1444302046

Subscribe to WSJ: http://online.wsj.com?mod=djnwires