French retailer Carrefour is likely to see an improvement in LFL sales – to -2.2% in the third quarter, from -3.5% in the second quarter – according to estimates from Barclays.
While price investments by Carrefour are becoming popular among customers, it is likely to impact the company’s top-line performance in France.
Other Regions
In Europe, Barclays expects the retailer to achieve LFL growth of -1.4%, compared to an overall consensus of -1.1%.
The weak growth has been attributed to slightly higher deflation on some product categories in Spain, the impact of more franchisee Delhaize stores opening on Sundays, and a continuing soft consumer environment and fierce competition in Poland.
LFL sales are projected to grow by 8.5% in Brazil, with all formats contributing to sequential improvement, particularly converted Grupo BIG stores.
In Argentina, Barclays expects a steep slowdown in LFL sales growth – from 233% in the second quarter to 170% in the third quarter – due to decelerating food inflation.
Outlook
The retail giant is likely to reiterate all its financial targets for this year, including growth in EBITDA, EBIT and net FCF, as well as an EBIT margin in France in line with last year’s level.
‘We expect Carrefour’s initiatives in France will gradually lead to improving commercial and operating performances and we believe the group will likely benefit from the recent consolidation process within the French food retail sector,’ Barclays announced in a note.
Carrefour will report its third-quarter results on 23 October.
The retailer recently commenced the rebranding of the Cora supermarkets that it acquired in July of this year. The acquisition includes the property of 55 hypermarkets and 77 supermarkets under the Cora and Match brands.
