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Carrefour Reports Slowing Sales Growth

By Greg Keller

PARIS -- Carrefour SA, the world's second-largest retailer, said Thursday its sales growth slowed to just 0.7% in the fourth quarter from a year earlier as its hypermarkets continued to underperform at home and across Europe.

The company, second only to U.S.-based Wal-Mart Stores Inc. among the world's biggest retailers, said that despite the fourth quarter slowdown it was on track to achieve the earnings targets it lowered in December. Last month, it warned that "deteriorating global consumption trends, particularly in Europe," would cause it to miss its previous forecast for earnings growth in 2008.

Carrefour reported sales of ¿25.7 billion ($33.9 billion) in the fourth quarter.

In a statement, the company's new Chief Executive Lars Olofsson said the company "can and should further improve its performance."

The company, which operates 1,302 hypermarkets around the globe, said it would achieve the targeted ¿1.5 billion in free cash flow for 2008, as well as "slight growth" in its operating profitability. A hypermarket is a superstore that combines a supermarket and a department store.

Until last month, Carrefour had been promising to deliver operating profit growth "in line" with its sales, which rose 5.7% to ¿97.6 billion last year.

Speaking in a conference call with analysts, Olofsson said fourth quarter sales had suffered as "Christmas was not as festive as usual." He noted that sales of Champagne at the group's hypermarkets and supermarkets in France fell, while sales of cheaper sparkling wines rose during the holiday period.
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