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Paris / Bloomberg
Casino Guichard-Perrachon SA, the French grocery retailer targetted by short seller Carson Block, reported higher first-quarter sales in its home market, easing pressure on Chief Executive Officer Jean-Charles Naouri.
Revenue in France rose 2.8 percent to 4.55 billion euros ($5.1 billion), Saint-Etienne, France-based Casino said on Thursday in a statement. Analysts predicted 4.52 billion euros. French same-store sales rose 1.5 percent in the quarter as growth in Geant hypermarkets and Leader Price convenience stores compensated for flat sales at Monoprix and Casino supermarkets.
“This is a solid set of results from Casino,†Bruno Monteyne, an analyst at Sanford C. Bernstein Ltd., wrote in a report. Geant is gaining market share, indicating that recent price increases haven’t hurt business, he said.
Casino is selling assets in Asia and Latin America to cut debt, while focusing on price and convenience in France as it competes for growth amid weak consumer spending.
The company is aiming to boost gross margin in France by more than 100 basis points, aided in part by sourcing agreements with rivals Intermarche and Dia, and increase same-store sales in its biggest market by more than 1.5 percent.
Block’s Muddy Waters, which began its attack in December, contends that Casino is using financial engineering to mask a deterioration of its core retail business and that owner Rallye has too much debt — allegations that Casino has dismissed. Casino, which had its debt rating cut to junk by Standard & Poor’s last month, has since completed the sale of its stake in Thailand’s Big C Supercenter for 3.1 billion euros, reducing its borrowings by 3.3 billion euros. Casino shares rose 0.7 percent to 54.82 euros at 9:15 a.m. in Paris. The stock has jumped 29 percent this year, giving the company a market value of 6.2 billion euros.