Europe's largest food retailer Carrefour has raised its cash flow target for this year as sales growth accelerated in the third quarter, especially in the firm's core French market.
Carrefour's closely watched hypermarkets benefitted from their 'attractive' low-price offers as buyers grappled with inflation, the company said.
Carrefour said it now expected free cash flow to come in 'comfortably above' €1 billion at the end of 2022, up from a previous forecast of 'at least' €1 billion.
Confident About Fourth Quarter
Chairman and chief executive Alexandre Bompard told analysts he was confident over prospects for the fourth quarter.
Carrefour was well armed to deal with an inflationary environment that would extend well into 2023, he added
Overall, business was consistent with the market consensus for full year 2022 operating profit, Bompard said, without citing a figure.
Third quarter sales reached €23.50 billion, a like-for-like growth of 11.3%, marking an acceleration from 7.3% growth in the second quarter 2022, Carrefour said, adding it still planned to save costs of €1 billion this year.
The company was showing "agility as consumers increasingly adapt their purchasing behavior to the new inflationary environment," Bompard said.
Consumers were buying "smaller baskets but more frequently and volumes are holding up quite well," Bompard said.
Core French Market
In the core French market, sales rose 6.6% like-for-like in the third quarter alone, with sales at hypermarkets up 5%, benefitting from their "discount" profile while tourism helped convenience stores, Carrefour said.
In Brazil, the group's second-largest market, the integration of the acquisition of Grupo BIG was continuing at a rapid pace. To date 15 stores have been converted, of which seven in the third quarter and they have been delivering above expectations since reopening, the group said. Carrefour expects 50 store conversions by end 2022.
Bompard, whom Carrefour reappointed in May 2021 to lead for another three years, is working on a new strategic plan and conducting an asset review as part of the process.
The new strategy, due to be unveiled on November 8, will notably allow the French retailer to step up digital expansion and be more resilient in an increasingly uncertain environment.
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