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Carrefour’s Positive Momentum Continues in Q4 With a Strong Close to the Year

Retailer reported stellar results with group like-for-like sales up 10.9% (11.3% in the third quarter).

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Securities In This Article
Carrefour
(CA)

Carrefour CA reported stellar fourth-quarter 2022 results with group like-for-like sales up 10.9% (11.3% in the third quarter). Within this, France reported 5.6% like-for-like growth in the fourth quarter, supported by resilient like-for-like growth across formats. Hypermarkets were up 3.7%, supermarkets up 5.9%, while trends for convenience stores continued to be strong, growing by 10.7% on a like-for-like basis. This is another notable performance by Carrefour France, especially considering the promising market share gains recorded during the quarter in value (0.2%) and volume (0.3%). In France, Carrefour has come a long way and recent trends in the region confirm that execution has yielded tangible results in a key market (France) and channel (hypermarkets) for the group. Brazil was robust (11.1% like-for-like growth) with market share gains and volume expansion. Europe’s like-for-like growth was 6.2% with all countries contributing to positive growth (Belgium was up 3.4% in an “extremely competitive market”). EBIT showed an improvement of 8.3% at EUR 2,377 million versus EUR 2,415 million in our model with group margins stable year on year. Notably, net free cash flow was EUR 1,262 million (versus guidance of over EUR 1 billion), with the company announcing a new EUR 800 million buyback program during 2023 (after EUR 750 million and EUR 700 million in 2022 and 2021 respectively), which we applaud. Guidance for 2023 was light on details, with Carrefour expecting growth in EBITDA, recurring operating Income, and net free cash flow in line with our estimates. We don’t expect to materially change our EUR 18.40 fair value estimate for Carrefour. At current levels, shares trade in 3-star territory.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Ioannis Pontikis, CFA

Director of Equity Research in Europe
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Ioannis Pontikis, CFA, is a Director of Equity Research in Europe for Morningstar, where he covers European grocers and global food and beverage companies like Tesco, Unilever, Nestle, and Danone, and manages a team of eight analysts across the Financials and Consumer sectors. He also leads Morningstar’s Equity Research Valuation Committee, advancing the firm's valuation methodology through significant projects such as developing new methodologies, refining our valuation model, and enhancing the efficacy of our ratings.

Before joining Morningstar in 2017, Pontikis spent six years on the buy-side, co-managing a $100M long/short equity fund and leading teams in applying machine learning to stock and equity factor selection models. He developed the fund's valuation and risk assessment framework, achieving strong risk-adjusted performance. Prior to this, Pontikis worked at Nestle S.A. in Athens, focusing on financial reporting, budgeting, and auditing proposals to improve processes.

Pontikis research has appeared in numerous media outlets including Bloomberg, CNBC, Reuters, Guardian, Frankfurter Allgemeine Zeitung among others.

Pontikis holds a bachelor’s degree in business administration from the University of Piraeus’s and a master’s degree in accounting and finance from the London School of Economics. He also holds the Chartered Financial Analyst® designation and studying towards an advanced post-masters degree in portfolio and risk management.

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