Casino supermarkets reports setback from French price war

French supermarket group Casino blamed unfavourable exchange rates and a price war in its home market for pulling down first-half profits on Tuesday, but kept its full-year forecasts.
Net profit fell by 8.9 percent from the equivalent figure last year to 176 million euros ($236 million) but at constant exchange rates, it rose by 5.8 percent.
Sales for the second quarter fell by 1.3 percent to 11.93 billion euros, although they rose by 6.5 percent if currency effects were stripped out.
Many European companies have reported that the high value of the euro until recently, and a fall of emerging market currencies, have undermined their headline results.
For the first six months, Casino's sales advanced 0.4 percent to 24.24 billion euros, and by 6.0 percent without currency factors.
But the current operating profit for the six months fell back 9.2 percent to 880 million euros. Again highlighting currency factors, if these were stripped out, the figure jumped 13.3 percent.
The operating margin, a particularly important measure of profitability for retailers, was steady at 3.8 percent.
This came against the backdrop of a price war among supermarkets in France, under strong attack from the rise of discount retailers such as Aldi and Lidl.
Even Casino's own discount brand, Leader Price, was heavily affected by price cuts in a bid to win customers.
International operating profits surged 21.6 percent excluding currency factors -- which chief executive Jean-Charles Naouri described as an "excellent" performance -- helped by a strong performance in Brazil.
The group said it was confident of returning to sales growth in France this year, along with improving growth in international operations, and boosting operating profit.
Casino shares dipped 0.22 percent to 94.02 euros in early afternoon trading. The overall CAC 40 French index was up 0.85 percent at 4,381.61 points.