Carrefour Delivers Largely in Line Q1, Confirms Guidance

Carrefour reported first-quarter 2022 results with group like-for-like sales up 3.4%, despite strong comps (up 4.2% in the first quarter of 2021). Within this, France reported flat growth with like-for-like growth in hypermarkets down 1.1% but against a tough comparable base (the first quarter of 2021 was "the best quarter in terms of market share trend in 4 years" for the channel). Supermarkets faced similar headwinds with like-for-like growth down 2.9% (versus up 7% in the first quarter last year), while trends for convenience stores reversed, growing by 9.4% on a like-for-like basis (versus negative 2.7% in the same period last year). Brazil was strong (up 7.5% like-for-like growth) with market share gains and volume expansion despite tough comparables. Management reiterated guidance on free cash flow ("comfortably above EUR 1 billion per year ") but did not provide one for group EBIT. Notably, the grocer confirmed continued strength in food e-commerce growth (which was up 10% in the first quarter versus up 56% in the first quarter of 2021 and up 45% versus the same period in 2020). We don't expect to materially alter our EUR 17.00 fair value estimate. At current levels, shares trade in 2-star territory.