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CONSUMER STAPLES: Carrefour (NR/BBB) 3Q trading update (#2)

CONSUMER STAPLES
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Analysts were searching for French colour in the earnings call. Not much new there, the price investments in hypermarket format are not great to see re. Auchan;

  • Re. -6% fall in Hypermarket simply flags harsher price investments in that format
    • Reminder Auchan mgmt said it trialled -15% px reduction in acquired casino stores which put it in line with Carrefour. That was from 1H when Carrefour reported hypermarket -3.4%. I.e. seems to have been continued acceleration in pricing from Carrefour to maintain market share and if so a potential headwind for Auchan.
  • Confirms guidance is to either stabilize or slightly grow French margins this year
    • It ran a 2.6% EBIT margin last yr, 1H was running at 1.6% (+14bps yoy)
    • Explicitly adds 2H is likely to see flat to growth in French margins yoy
  • Confirms French market volumes as a whole are improving
    • adds seeing trading up in products
    • above simply being offset by price investments re. headline falls
Numbers from before here
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Analysts were searching for French colour in the earnings call. Not much new there, the price investments in hypermarket format are not great to see re. Auchan;

  • Re. -6% fall in Hypermarket simply flags harsher price investments in that format
    • Reminder Auchan mgmt said it trialled -15% px reduction in acquired casino stores which put it in line with Carrefour. That was from 1H when Carrefour reported hypermarket -3.4%. I.e. seems to have been continued acceleration in pricing from Carrefour to maintain market share and if so a potential headwind for Auchan.
  • Confirms guidance is to either stabilize or slightly grow French margins this year
    • It ran a 2.6% EBIT margin last yr, 1H was running at 1.6% (+14bps yoy)
    • Explicitly adds 2H is likely to see flat to growth in French margins yoy
  • Confirms French market volumes as a whole are improving
    • adds seeing trading up in products
    • above simply being offset by price investments re. headline falls
Numbers from before here