By Dominique Vidalon
PARIS (Reuters) -Casino said group sales returned to growth in the first quarter, driven by a robust performance in Latin America and expressed confidence about prospects in the retailer's home market of France this year.
Casino said on Friday it expects a recovery in sales growth momentum this year in France, notably as April data showed tourists were flowing back to the Paris area following the COVID crisis.
It also reiterated its aim to maintain a high level of profitability and improve cash flow generation this year.
To boost sales growth, Casino banks on an accelerated expansion in convenience stores located in city centres such as Monoprix, Franprix and Naturalia and its focus on e-commerce, notably home delivery, thanks to partnerships with Ocado, Amazon, and Gorillas, Finance Chief David Lubek told analysts.
The retailer, which has been selling assets to reduce debt, confirmed its goal of completing its 4.5-billion-euro ($4.9 billion) disposal plan by the end of 2023. Disposals to date amount to 3.3 billion euros.
"We have sufficient options to be confident to do the remaining 1.2 billion euros by end-2023," Lubek said.
The quarterly report initially boosted Casino shares by 3%. But by 0823 GMT Casino shares - which have lost as much as 30% so far this year - had turned negative, trading down 0.3% at 16.05 euros.
"The company's mixed Q1 sales and still ambiguous FY guidance do little to assuage fears around an impaired French free cash flow outlook and undiminished leverage challenges," Jefferies analysts said.
Casino, which also controls Brazil's Grupo Pao de Acucar, posted first-quarter sales of 7.48 billion euros.
On a same-store basis and excluding acquisitions, currency effects and revenue on fuel, group sales rose 3.2% compared to a 0.4% decline in the fourth quarter of 2021.
This reflected 9.7% sales growth in Latin America, where strong momentum continued at the Assai cash and carry stores in Brazil. There was also strong growth at the Exito stores in Colombia.
In France, sales growth was still negative but improved quarter on quarter while net cash flow improved by 570 million euros. Same store sales were down 1.6%, improving from a 3% decline in the fourth quarter of 2021.
In the four weeks to April 17, French sales were however up 2%, driven notably by a return of tourists to Paris, Lubek said.
To boost profitability, the group is looking to monetise client data, make savings from purchasing deals - notably with France's Intermarche - and to focus more on e-commerce, organic food, convenience stores and energy services.
($1 = 0.9227 euros)
(Reporting by Dominique Vidalon; editing by Sudip Kar-Gupta, Jason Neely and Emelia Sithole-Matarise)