Staple Retail equity research

Explore the most viewed and latest equity research and media content for companies within the Staple Retail sector. Stocks in this sector provide goods and services in the food wholesale and drug retail industries.

Staple Retail equity research

Explore the most viewed and latest equity research and media content for companies within the Staple Retail sector. Stocks in this sector provide goods and services in the food wholesale and drug retail industries.

Latest Content

Tesco

Softer start to FY19

Q1 lfl performance was softer than our expectations. Unfavourable weather and weak non-food sales (general merchandise and clothing) in the UK were the key pain-points. On a positive note, the domestic business once again clocked positive volume. The upcoming stock price triggers would be the Capital Markets Day on 18 June 2019 and Tesco’s ability to cope with Brexit (due in end October 2019). No change to the stock recommendation.

 View

  • 14 Jun 19
  • -
  • -

Casino Guichard Perrachon

Smoothing out the wrinkles

Casino’s financial obligations contain a mandatory acceleration clause in the event of a change of control of the company. It raised some concerns about Casino’s liquidity position if Rallye were to default some day in the future (when the debt re-profiling process is over). However, we are now at ease following the clarification by Casino. As a result, we maintain the positive stance on the stock.

 View

  • 13 Jun 19
  • -
  • -

LOOK PGD TLY KRM BAGR HUW BOOM TOT ACSO STR

Small Cap Feast

Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019

 View

  • 31 May 19
  • -
  • -

Casino Guichard Perrachon

Casino survives the Bear trap, yet again!

Casino’s parent Rallye has announced the commencement of a debt re-profiling process under the protection of French courts. Casino is not included in this process (there is no cross default provision). In the short-term, Casino should get a breather, as Rallye would freeze creditor payments (hence, does not need dividend payments from its subsidiary). Even in the mid/long-term, Casino should be better placed relatively (we discuss some scenarios below). Moreover, we repose our faith in Casino’s business model/FCF generation prospects in France. ‘Buy’ reiterated.

 View

  • 28 May 19
  • -
  • -

METRO

No surprises in Q2; hopes pinned on the new CEO

Q2 performance was in line with our expectations. Despite the lfl decline, the negative calendar impact and a 50bp slump in the gross margin, the adjusted EBIT margin (even after excluding the Fnac Darty contribution) remained flat. While new management needs to focus more on the Netherlands, the Spanish issue seems non-structural. The launch of initiatives like a centralised pricing strategy is also a step in the right direction. No change to our stock recommendation.

 View

  • 22 May 19
  • -
  • -

Sonae SGPS

In good shape

The good performance in the food retail and the full consolidation of Sonae Sierra are improving the holding company’s top-line and profitability, the discount to NAV retracted to 18.9% but remains attractive.

 View

  • 19 May 19
  • -
  • -

WM Morrison Supermarkets

Softer sales growth in Q1 19

Q1 resulted in a sequential slow-down in lfl retail growth compared with the past few quarters. The new deal with Ocado is likely to save some bucks (in the near term) and enable Morrison to make new digital partners. However, it remains to be seen if Morrison is able to leverage this opportunity. We will trim our estimates slightly but maintain the stock recommendation.

 View

  • 15 May 19
  • -
  • -

Greggs

Greggs - Robust trading performance - earnings upgrade

An unscheduled trading update confirming exceptional 11.1% like-for-like (l-f-l) sales growth in the first 19 weeks of FY19, and a fourth earnings upgrade in six months is testament to Greggs’ outstanding progress on the repositioning of the brand as a leading food-on-the go-format. We increase our FY19 and FY20 underlying PBT forecasts by 9%. The company is highly cash generative and likely to distribute part of the substantial cash balance (FY19e: £102.6m) with the H119 dividend.

 View

  • 14 May 19
  • -
  • -

J Sainsbury

Trying to revive in life without Asda

The FY18/19 ended on a positive note (earnings were ahead of consensus but in line with our expectations). Despite cost savings, the grocery business remains under pressure, and management needs to stem the market share erosion. Argos delivered synergies ahead of schedule and the reduction in net debt is also a positive development. A revival in banking profits and a grocery sales uplift would be crucial stock price triggers in our opinion. We maintain our positive stance due to the cheap valuation.

 View

  • 03 May 19
  • -
  • -

Casino Guichard Perrachon

French revenue growth halts in Q1; LatAm remains in the driving seat

Casino’s Q1 sales witnessed a strong momentum in LatAm (led by Brazil) but French same store sales were softer vs our expectations. This was largely due to tougher comps, the adverse impact of the yellow vest movement in January and February. Although the exit rate was better in the last month, it would be crucial parameter for market sentiment going forward. We believe management will be able to achieve profit guidance and optimism might seep in starting with the H1 results. No change in stock recommendation.

 View

  • 03 May 19
  • -
  • -