Belgium-based retailer Colruyt has maintained its target for full-year profits despite a drop in half-year earnings.

Colruyt yesterday (28 November) reported a 7.6% decrease in net profit to EUR158.7m (US$12m) for the six months to the end of September. The retailer’s earnings per share of EUR1 failed to meet an analyst target of EUR1.08, according to data compiled by Bloomberg.

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Operating profit fell 6.5% to EUR228.6m, with Colruyt pointing to higher operational costs.

Nevertheless, the retailer kept to a forecast it issued in September, when it said it expected its annual net profit to “approach” last year’s level. However, Colruyt did admit that hitting that target “remains a challenge in the current market climate”.

Colruyt said its operations in France, where it has 57 stores, had made a loss in the first half of its financial year after investment in price and an accelerated programme of store expansion.

The group’s gross profit increased 6.6% to EUR959.4m but the company said its margin was lower due to pressure on its retail prices and the higher cost of meat, fruit and vegetables.

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The retailer booked a 7.7% increase in revenue to EUR3.83bn on the back of new stores and its increased market share in Belgium, which it said rose by 50 basis points to 24.86%.

However, Colruyt said a “less favourable” summer, combined with “intensified” competition hit revenue growth in the second quarter. In the first three months of its financial year, Colruyt saw revenue increase 8.9%.

Click here for the complete statement from Colruyt.