Not Wal-Mart Stores, Inc. (WMT), But This Other Stock Is a Buy?

George Plassat has acted quickly and the company returned to growth in the fourth quarter of 2012. After stripping out the effect of closed businesses, revenue grew 0.8%, while full-year sales totaled E86.6 billion, up 1%.

Furthermore, during Q4 2012, the company reported that it continued to see an improvement in its home market, France, where Carrefour is fighting fierce competition. The company has been driving growth in France through aggressive cost cutting, which appears to be working as sales grew 0.6% for the last quarter of 2012.

In addition, it seems that Carrefour’s growth plan is pleasing credit agencies, as in March Standard & Poor’s raised its outlook on the retailers debt to “positive” from “stable,” after the company sold assets worth E2.8 billion last year, bringing its adjusted debt-to-EBITDA ratio down to 2.4 times, around the same as Wal-Mart Stores, Inc. (NYSE:WMT).

Moreover, Carrefour’s turnaround plan has pleased many analysts, who have revised the company’s earnings estimates for the next two years upwards. Before the last quarter of 2012, the company was expected to earn between, E0.6 and E1.9 per share for the full year 2013. Analysts have now revised this range to E1.1 and E1.4. Meanwhile, average EPS estimates for 2014 have been revised up from E1.5 to E1.6 – up 7%.

So in conclusion

So in conclusion, Carrefour’s exposure to Europe and falling revenues could scare some investors. However, the company’s turn-around plan is on track and investors have already started to see some returns with the company’s share price up nearly 20% this year on recovery hopes.

Overall, while Wal-Mart could be more appealing for defensive investors, Carrefour could be a perfect turnaround play.

The article Where to shop, Nationally or Internationally? originally appeared on Fool.com and is written by Rupert Hargreaves.

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