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

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Carrefour
(CA)

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.

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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Ioannis Pontikis

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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