Carrefour Earnings: Solid Growth With Market Share Gains and Grupo BIG Integration on Track

Carrefour CA reported solid first-quarter 2023 results with group like-for-like sales (excluding petrol and calendar effects) up 12.3%. Within this, France reported 7.1% like-for-like growth in the first quarter, supported by resilient like-for-like growth across formats. Hypermarkets were up 6%, supermarkets up 7.1%, while trends for convenience stores continued to be strong, up 9.6% on a like-for-like basis. This is another notable performance by Carrefour France, which was coupled with volume market share and new customer gains during the quarter (560,000 new customers, according to the company). In France, Carrefour has come a long way and recent trends in the region confirm that execution and positioning of the business has yielded tangible results in a key market (France) and channel (hypermarkets), with the latter benefiting from its discount appeal and driven by solid like-for-like sales growth in food (up 7.5%). Brazil was up 5.7%, which reflects market share gains, according to the company. The integration of Grupo BIG is underway with 42 remaining store conversions expected to be completed in the second quarter (82 converted to date). Europe’s like-for-like growth was 8.8% with all countries contributing to positive growth (Belgium was up 9.9% with hypermarkets leading market share gains). The company has completed EUR 200 million of its EUR 800 million share buyback program and confirmed guidance for 2023, 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.