PARIS: Group Casino SA (CO.FR) has reported a 11% decline in fourth-quarter revenue, with the supermarket operator’s exposure to Latin American currencies offsetting modest growth in demand in France, its home market.
The group, under fire from short-selling and research firm Muddy Waters LLC, said revenue in the three months to end-December fell to 11.79 billion euros ($12.85 billion) from the same period a year earlier, slightly above average analyst expectations. Revenue fell 0.3% calculated on a comparable basis, excluding fluctuations in exchange rates. On a same-store basis, revenue fell 2.7%.
Casino’s trading update comes amid sustained pressure from Muddy Waters which has accused the retailer of using accounting gimmicks and financial engineering to inflate its earnings, allegations the company has contested.
On Wednesday, Muddy Waters’s founder Carson Block said that Standard & Poor’s understated the company’s net debt and published a list of 10 questions for Casino’s management to answer.
The retailer’s share price was on the slide before Muddy Waters made its short position known on concerns about the difficult French and Brazilian markets as well as the company’s balance sheet. The shares opened up 1.7% on the Paris bourse on Thursday. The stock is still down 46% in the past year.
Casino, which derives more than 40% of sales from Brazil and other Latin American countries, said fourth-quarter revenue from its grocery business in the region fell 15% to EUR3.71 billion from the same period the previous year. Regional sales of electronics goods tumbled 36% to EUR1.29 billion.
The deterioration in the Brazilean real in the past year has weighed down on Casino’s revenue when converted to euros. The group’s e-commerce unit also reported a 20% drop in revenue to EUR876 million.
In contrast, activity in France continued to rebound after several slow years, with fourth-quarter sales up 1.5% to EUR4.94 billion. That number was in line with analyst estimates.
Casino released no profit figures on Thursday, but said the recovery of its retail activities in the second half of 2015 had “gathered momentum and led to good results in terms of market share, sales and profitability.” Revenue for the full year rose 0.3%, excluding exchange rate fluctuations, to EUR46.1 billion, Casino said.
