Carrefour: Positive Momentum Continues in Third Quarter

Carrefour CA reported a third-quarter trading update, with group like-for-like sales up 9%. Within this, France reported 4.3% like-for-like growth in the quarter, supported by resilient like-for-like growth across formats. Supermarkets sales were up 3.8%, but the standout performance came from the Hypermarkets segment, which was the main driver (up 4.2%), with trends for convenience stores continuing to be strong, up 5.3% on a like-for-like basis. Carrefour France reported another notable performance. Recent trends in the region confirm that execution and positioning of the business continue to yield tangible results in a key market (France) and channel (hypermarkets), driven by solid like-for-like sales growth in food (up 5.7%, while nonfood was down 6.8%).

In Latin America, Brazil was down 3.7%, driven by Atacadao (down 2.7%), because of the adverse environment of falling inflation and negative volume. Former Grupo BIG stores that are now converted to Atacadao have ramped up fast with a solid 22% like-for-like growth in the quarter. In Europe, like-for-like growth was 4.1%, with all countries except for Poland contributing to positive growth (notably Belgium’s like-for-like sales were up 7.5%).

The company has completed EUR 664 million of its EUR 800 million share-buyback program and confirmed guidance for 2023; it expects growth in EBITDA, recurring operating income, and net free cash flow in line with our estimates. We don’t expect to change our EUR 18.10 fair value estimate. At current levels, shares trade in 4-star territory.