PARIS (Reuters) – France’s Carrefour <CARR.PA> on Tuesday raised its goal for cost savings under its strategic overhaul plan as Europe’s largest retailer delivered savings of 480 million euros ($563 million) in the first half of 2020.
Carrefour said group operating profits rose 29.1% at constant exchange rates from the same period last year to 718 million euros. This compared with 628 million euros in a Reuters poll of three analysts.
The performance reflected cost cuts, strong second quarter sales in Brazil and Spain, which made up for a more subdued performance in France where sales at large hypermarkets fell 3.6% like-for-like due to the coronavirus lockdown.
“Our first-half performance is very solid: It proves the resilience of our model, its dynamism and its profitability,” Chairman and Chief Executive Alexandre Bompard said in a statement
The company said it was now targeting cost savings of 3.0 billion euros on an annual basis by the end of 2020 against a previous target of 2.8 billion euros
Carrefour is in the midst of a five-year plan it launched in 2018 to cut costs and boost e-commerce investment to boost profits and sales, as it seeks like its peers to tackle competition from online rivals such as Amazon <AMZN.O>.
It is also expanding into convenience stores to reduce its reliance on big hypermarkets, focusing more on organic products and private-labels, having last year sealed a purchasing alliance with British rival Tesco <TSCO.L>
Carrefour sticked to its other financial and operational targets under its 2022 strategy plan.
(Reporting by Dominique Vidalon; Editing by Edmund Blair)