(News Bulletin 247) – The distributor delivered its third quarter activity, generally below expectations. Growth in France was notably slowed down by promotions in the networks of the Cora and Match brands, acquired in July 2024.

In the stock market, there is a term to describe good and bad results: “a mixed bag”. This is how Barclays describes the Carrefour publication, delivered Wednesday evening.

The major retailer published revenues of 22.46 billion euros in the third quarter, reflecting an increase of 2.1% on a number of comparable stores year-on-year. Jefferies underlines that growth excluding Argentinian hyperinflation reached 0.9% on a comparable basis while the consensus (the average forecast of analysts) retained a rate of 1.8%.

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France weighed down by Cora and hypermarkets

In France, which represents around half of the group’s turnover, growth reached 0.7% on a comparable basis compared to expectations of 1.1%.

Growth in France was slowed by promotional investments made by the Cora and Match brands, bought by Carrefour in July 2024.

“Ex-Cora hypermarkets thus benefit from the alignment of prices with Carrefour hypermarkets, the rise of own brands, the adoption of the Group’s promotional mechanisms, the ‘Le Club Carrefour’ loyalty program and the modernization of customer journeys,” explains the company. “These initiatives temporarily weigh on turnover,” adds the company.

Excluding Cora and Match, Carrefour’s growth in France stood at 1.6% on a like-for-like basis, thanks to good momentum in food products.

However, hypermarkets continue to constitute “a pain point”, according to the independent research firm Alphavalue, with a drop in revenue of 0.9% on a comparable basis, the only store format in decline over the quarter in France.

“The trends in terms of market share in the main French market have been reassuring, with a stable market share for the whole of the third quarter and a gain of 30 basis points (0.3 percentage point, Editor’s note) in September”, however appreciates Barclays.

Brazil hit by interest rates

In Europe, growth stood at 1% like-for-like, supported in particular by Spain (+1.3% like-for-like) and Belgium (+2.1%), while Poland (-1.3%) was penalized by strong competition.

The biggest gap with expectations is observed in Brazil, where growth was limited to 1.1% on a comparable basis, while the consensus expected an increase of 4%, according to Jefferies. Carrefour cited very high interest rates in the country which weigh “on the purchasing power of consumers” to explain the slowdown in its growth.

At the end of this quarter, Carrefour confirmed all of its objectives for 2025, namely a slight increase in gross operating income (Ebitda), current operating income, and net free cash flow.

On the Paris Stock Exchange, Carrefour shares fell 3.2% this Thursday, October 23, around 4:15 p.m., showing the fourth largest drop in the CAC 40.

“While we are moderately reassured by the potentially rapid recovery in fourth-quarter growth in France, we expect investors to continue to question the visibility of annual forecasts given this third-quarter release and ongoing pressures in Brazil,” Jefferies judges.

“This third quarter publication, which we would describe as average or even slightly negative, should be seen in the light of a share performance of almost +10% over the last rolling month,” writes Oddo BHF.

The broker does not see any catalyst for the stock in the short term, other than a possible sale of the company’s activities in Poland and/or Argentina, which would provide the funds to possibly finance a share buyback program. In the meantime, Oddo BHF remains cautious and maintains its advice at “underperformance”.