Carrefour Stock: Shares Surge Amid Strong Results

Carrefour's stock leaped an impressive 5.5% on Friday, placing the French retail giant at the top of market performers after releasing better-than-expected half-year results. The shares closed at €12.97, marking a significant turnaround following a recent period of weakness. Analysts had underestimated the company's performance, with comparable sales increasing by 4.4% against predictions of just 2.7%. The retailer's gross revenue reached €23.89 billion, substantially exceeding the €23.50 billion forecast. Particularly surprising was the positive development in Carrefour's home market, where hypermarkets and supermarkets grew by 0.6% and 0.7% respectively, despite expectations of decline. The company's operating profit in France climbed to €264 million, 12% above estimates, while return on investment improved by 20%.

Strategic Challenges Amid Growth

Despite the encouraging financial performance, Carrefour faces several strategic challenges. The planned divestiture of its struggling Italian operations, which generated a €67 million operating loss last year, has already resulted in a significant €460 million write-down. Additionally, performance in key international markets shows mixed signals, with Brazil growing by 4.4% but falling short of 5.4% expectations. Meanwhile, Argentina's profitability has declined sharply, with return on investment dropping from €51 million to €26 million. While Carrefour maintains its annual forecast for modest growth in EBITDA, return on investment, and free cash flow, the company's expansion strategy of 274 new convenience stores in France raises questions about its long-term competitive position against growing online competition.

Ad

Fresh Carrefour information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Source StockWorld