SAO PAULO, May 7 Reuters Carrefour Brasil, which is controlled by France39;s Carrefour, reported a net profit of 39 million reais 7.7 million for the first quarter, reversing losses in the same period last year, as higher food inflation expanded its profits.

On an adjusted basis, it also swung back to the black with a 52millionreal net profit, although this profit came in below the forecast of 137.4 million reais from analysts polled by LSEG.

Carrefour Brasil had already disclosed its firstquarter sales figures in late April, which rose 2.5 yearonyear, with hybrid wholesale unit Atacadao, which accounts for nearly 70 of the group activity, growing sales by 6.6.

We have seen a recovery of food inflation to positive levels, which obviously had positive effects in our prices and volumes, CEO Stephane Maquaire told journalists on Tuesday.

He added that recent food inflation trends have triggered improved sales by Atacadao to corporate customers, mainly smaller grocery stores, which had reduced their purchases due to financial pressures from lower margins.

Merchants have been recovering their dynamics of buying to replenish stocks, he said, adding this dynamic is just in the beginning.

About Carrefour Brasil39;s retail segment, which saw sales slip more than 10 in the quarter, Maquaire said management has been starting to test lower prices for some basic products aiming to increase the unit performance.

Carrefour Brasil said its consolidated adjusted earnings before…