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SANTIAGO, Nov 28 (Reuters) - Chilean retailer Cencosud on Friday reported a 33 percent drop in profits in the third quarter, hurt by a weaker peso and as bargain-hunting by reluctant shoppers ate into margins.
Cencosud said net profit in the three months to end-September was 29.2 billion Chilean pesos ($49 million), compared with 43.8 billion a year ago and market expectations for 22.0 billion, according to a Reuters forecast.
The owner of supermarket chain Jumbo, home improvement chain Easy and department stores Paris has operations in five South American countries, although the bulk of its sales are still in its Chilean home market, where economic growth has cooled rapidly in 2014.
Earlier on Friday, government statistics showed retail sales fell for the second month in a row in October.
Supermarkets same store sales growth was nonetheless up 4.4 percent in the quarter in Chile, Cencosud said, but contracted by a similar margin in the department store sector.
The Chilean peso has weakened more than 13 percent against the dollar this year, which Cencosud said hurt its bottom line.
Overall gross margins in the third quarter narrowed to 26.7 percent from 27.6 percent a year ago, hurt in particular by Argentina, where the company said supermarket consumers had been trading down.
Like larger rival Falabella, Cencosud has been diversifying into other Latin American markets. It is trying to digest a series of acquisitions in recent years in fast-growing Colombia and regional giant Brazil, which have ratcheted up its debt and increased costs as it consolidates.
It has said a key focus is reducing its debt to maintain its investment grade, currently rated BBB- by Fitch.
Shares in Cencosud closed on Friday at 1,580 pesos, down around 16 percent in the year to date. (Reporting by Rosalba O'Brien; Editing by Chizu Nomiyama and Dan Grebler)