Every investor knows that the largest retailer in the world is Wal-Mart
The second-largest retailer in the world is France's Carrefour (OTC BB: CRERF). The company's so unknown in the U.S., or at least so insecure about its name recognition, that after publishing its biannual earnings results internationally last week and having those same results written up in The Wall Street Journal the next day, Carrefour then paid handsomely to purchase a quarter-page ad in the Journal to make sure everyone heard the news. This is either a company really dedicated to communicating with its shareholders or a company with a major insecurity complex.
Which it shouldn't have, because Carrefour's results from the first half of 2004 were actually quite good. Sales were up 2.9% despite the effects of a strong euro, which depresses the euro value of its sales from abroad. "Net result group share," which is apparently French for "net profit," rose 5.3%. More familiar figures, such as EBIT and EBITDA, also increased, up 4.5% and 3.8%, respectively. And the company paid off 1.5 billion euro in debt, or about 14% of the debt load it started the year with, while announcing plans to sell off some of its weaker stores to continue paying debt down by another 20%.
Of course, to U.S. investors all of the above probably is more relevant to investments in No. 1 retailer Wal-Mart than in No. 2 Carrefour. The stronger Carrefour's position, the less likely its shareholders will agree to sell it to Wal-Mart (read about our musings on this outcome here.) There is also a rumor floating about that Carrefour's divestment plans include an exit from Mexico, where the French retailer also lags Wal-Mart. If Carrefour does abandon the Mexican market, chances are good that Wal-Mart will pull a Home Depot
Fool contributor Rich Smith owns no shares in any of the companies mentioned in this article.