October 17, 2019 / 5:54 PM / 2 months ago

Debt-laden Casino sees third quarter sales slow but keeps 2019 targets

PARIS (Reuters) - French retailer Casino (CASP.PA), which is battling investor concerns over its debts, said sales growth slowed in the third quarter, reflecting a weaker performance in France.

Casino - which has been selling assets to reduce its debt and which also controls Brazil’s Grupo Pao de Acucar (PCAR4.SA) - nevertheless kept its 2019 financial goals for France, namely a 10% rise in current operating profit for the retail arm.

Finance chief David Lubek said Casino was focussed on delivering its strategy plan in France where it is increasingly focussed on e-commerce, food and convenience stores.

“We have a clear strategy in place and are quite confident looking forward,” Lubek said, adding that deleveraging the group remained a key focus.

Sales reached 9.05 billion euros (7.8 billion pounds) in the third quarter, broadly in line with analyst estimates.

On a same-store basis and excluding fuel and calendar effects, group sales rose 1.5% in the third quarter, compared to 2.3% growth in the second quarter.

In France, sales were hit by the disposal or closure of loss-making stores. On a same-store basis however, the overall performance was still a lacklustre 0.2% sales rise.

Casino, along with domestic peers such as Carrefour (CARR.PA) and Auchan [AUCH.UL], faces intense price competition in its home market as well as challenges from online players such as Amazon (AMZN.O), which has made inroads in the sector.

In May, Casino Chairman and Chief Executive Jean-Charles Naouri placed Casino’s parent companies, including Rallye, under protection from creditors. Talks with bankers started in September.

Naouri has been hunting for ways to ease the company’s debts - and those of parent company Rallye - in part via asset sales.

Last month, Casino said it was in talks to sell its French discount store chain Leader Price to German low-cost rival Aldi

This came after Casino announced in August a new 2 billion euros asset disposal programme, in addition to the 2.5 billion initially sought to reduce its debt burden.

In September, Czech businessman Daniel Kretinsky and Slovak partner Patrik Tkac bought a 4.63% stake in Casino in a show of support for Naouri.

Casino shares have gained 19.7% since the start of the year, helped by a string of positive news ranging from asset sales to Kretinsky’s support. This followed a 28% stock fall last year.

Reporting by Dominique Vidalon; Editing by GV De Clercq

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