Casino’s Q3 performance was a mixed bag; sales and profitability were healthy overall but French same-store sales were flattish. Low tourist numbers in July were followed by positive momentum in the subsequent months. We see more chinks in the armour, however, and Q4 is likely to be do or die in terms of both the operational performance and gross debt reduction. We plan to trim our estimates but will maintain our positive stance given the cheap valuation.

Casino, Guichard-Perrachon SA

• 30 Oct 20
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Carrefour’s Q3 trading performance was the best in the past twenty years. The Brazilian and Spanish operations should continue to drive the momentum and France is also expected gradually to gain further strength. While lockdown worries (in France) have dampened investor sentiment, we see Carrefour as well placed to end FY20 on a strong note, and also achieve the targets of the performance improvement plan. We maintain our positive stance on the stock’s valuation.

Carrefour SA

• 29 Oct 20
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Greggs’ Q320 trading update shows a recovery in sales in line with our expectations. There has been good progress: getting all infrastructure up and running, and adapting to the new environment, both in store (including the Click and Collect service) and in generating strong incremental sales from the new Delivery offer. We retain our existing forecasts. The uncertainty about the recovery in sales leaves the EV/sales multiple for FY21e of 1.1x lower than recent multiples.

Greggs plc

• 30 Sep 20
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Casino has lost more than 50% of its market value over the past ten months. We spoke with the group’s CFO to get a clearer perspective about the pressing issues, especially the strength of the French operations, high leverage and some governance-related matters. There is no doubt the stock is controversial and poses a higher risk vs most European grocers. However, the business is still robust and the issues are being addressed. In essence, Casino is a screaming ‘Buy’ even after factoring in all concerns.

Casino, Guichard-Perrachon SA

• 13 Sep 20
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Sonae’s H1 results showed a strong resiliency on the back of the solid sales performance of the food retail and electronics retail divisions. Sonae MC was able to leverage its leading position in Portugal and its broad presence across multiple food retail formats to benefit from the positive dynamic surrounding the market.

Sonae SGPS SA

• 28 Aug 20
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Greggs’ interim results were heavily affected by the estate closure for the majority of Q220, due to COVID-19. The key takeaways are that operating cash burn during lockdown was in line with management expectations, and current trading, albeit with limited data, indicates gradual weekly progress in revenue, described by management as encouraging. We assume recovery through H121e, before stabilising at a revenue run-rate equivalent to 90% of the level in FY19. The resulting EV/sales multiple of 1.2x for FY21e, is in line with recent multiples. It reflects lower estimated revenue in that year and uncertainty about the rate of recovery.

Greggs plc

• 04 Aug 20
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