* Q2 sales 11.93 bln eur vs consensus 11.8 bln eur
* Q2 French hypermarket sales improve from Q1
* Casino “comfortable” with consensus for 2014 EBIT - CFO (recasts, adds CFO comments, shares)
By Dominique Vidalon
PARIS, July 15 (Reuters) - Casino predicted its operating profit would rise this year after posting forecast-beating sales in the second quarter led by its top market of Brazil.
France, where Casino earns about 40 percent of revenue, also saw a marked improvement in hypermarkets sales compared with last quarter because of price cuts at such Geant Casino stores.
Nevertheless Finance Director Antoine Giscard d‘Estaing said he did not expect a much improvement in France’s economy and that cash-strapped shoppers would continue to watch prices.
Sales at LeaderPrice discount stores however fell 8.6 percent in the quarter because they were still in early in the process of lowering prices. The sales are expected to begin growing again in early 2015.
“At this stage for 2014 EBIT we are comfortable with market consensus of around 2.4 billion euros,” said Giscard d‘Estaing on a conference call, referring to core operating profit.
Such a target would imply a 1.7 percent rise from last year’s operating profit of 2.36 billion euros.
Casino - which makes 60 percent of its sales in emerging markets and controls Brazil’s top retailer, Grupo Pao de Acucar - said second-quarter group sales reached 11.93 billion euros ($16.19 billion).
Analysts expected 11.8 billion euros in sales, according to Thomson Reuters I/B/E/S.
Stripping out acquisitions, currency effects and excluding petrol, sales rose 6.5 percent on a comparable basis, roughly similar to the 6.6 percent growth seen in the first quarter.
Casino has been expanding for some years in the fast-growing emerging markets of Thailand, Brazil, Vietnam and Colombia, away from weaker growth in Europe, although Asia has slowed recently.
In Brazil, like-for-like sales growth excluding petrol and calendar effects, was 9.8 percent, an acceleration from 8.7 percent growth in the first quarter.
Asked about the outlook for Brazil’s economy, Giscard‘Estaing said: “One cannot say there is no risk” of a slowdown.
“We have to prepare the business units to face a tougher environment,” he added, referring to the Brazilian operation and other emerging markets.
Retailers across Europe such as Carrefour and Tesco have struggled as shoppers’ disposable income is squeezed by subdued wage growth and austerity measures. Most have responded with price cuts.
In the last quarter of 2012, Casino ditched confusing promotions in favour of permanent price cuts, a move that initially cost it some customers at its Geant hypermarkets.
These price cuts have only started to help attract customers in recent months, helping Casino’s French hypermarket sales.
Same-store sales at the group’s French hypermarkets rose 1.1 percent in the quarter, excluding fuel and calendar effects, accelerating from 0.1 percent growth in the first quarter.
Food sales at Geant Casino grew by 3 percent boosted by a 6.3 percent rise in volume and a 2.1 percent rise in customer traffic.
Casino shares closed 0.45 percent lower on Monday at 94.32 euros. The stock has gained 13.1 percent so far this year, outperforming Carrefour’s 4.9 percent loss.
$1 = 0.7369 Euros Reporting by Dominique Vidalon; Editing by Leila Abboud