July 13, 2016 / 7:27 AM / 2 years ago

UPDATE 1-Retailer Casino says Brazilian business improving

* Casino Q2 like-for-like sales up 3.8 pct vs 1.5 pct growth in Q1

* French Q2 like-for-like sales up 1.2 pct vs 2.9 pct growth in Q1

* Casino declines to comment on 2016 French goals (Adds details, CFO, analyst comments)

By Dominique Vidalon and Pascale Denis

PARIS, July 13 (Reuters) - French retailer Casino said on Wednesday its sales growth accelerated in the second quarter on an improving performance in Brazil, its second-largest market after France, where its consumer electronics business returned to growth.

In its core French market, Casino’s performance suffered setbacks ranging from bad weather that hit clothing sales at Monoprix stores to strikes and floods.

The group, which saw its credit rating cut to junk status by Standard & Poor’s in March, declined to say in a call with Reuters whether this would affect its annual target for a rise in profit and cash flow in France.

Casino, which controls Brazil’s top retailer, Grupo Pao de Acucar, said second-quarter group sales reached 9.97 billion euros ($11.02 billion).

Stripping out acquisitions, currency effects and revenue on fuel, sales rose by 3.8 percent, a marked acceleration from the 1.5 percent growth seen in the first quarter.

“Overall, a solid statement, which we expect to be supportive of the shares this morning,” said Citi analyst Nick Coulter, adding that the market consensus had been for 9.83 billion euros.

In Brazil, the Cash and Carry Assai stores saw rising food sales and promotions boosted revenue at its Extra hypermarkets.

Same-store sales at the group’s Via Varejo consumer electronics unit rose 2.6 percent, a turnaround from a 11.8 percent decline in the first quarter, helped by cost cuts and better trading conditions.

Overall like-for-like French sales growth slowed to 1.2 percent in the second quarter, which was behind the 1.5 percent growth Casino has forecast for the full year.

Asked if this changed Casino’s forecast for a 50 percent jump in 2016 trading profit to more than 500 million euros at its French operations, Giscard said: “I am not nervous”. He added that the company would say more when it reports first-half earnings on July 29.

$ = 0.9040 euros Reporting by Dominique Vidalon; Editing by Laurence Frost and Louise Heavens

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