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Carrefour predicts more profit despite high inflation

Carrefour's second-largest market in Brazil, increased by 9% at constant currency rates

Europe’s largest grocery retailer, Carrefour, is confident about its 2023 outlook after reporting a record free cash flow of 1.26 billion euros (USD 1.35 billion). It is another rise for the company in full-year operating profit despite high inflation.

Earnings before interest, taxes, depreciation, amortisation (EBITDA), recurring operating income, and net free cash flow are the company’s three key metrics and Carrefour predicted further growth in these three areas this year.

In light of the significant inflation in the first half of the year, Carrefour’s chairman and CEO, Alexandre Bompard, told analysts that the company anticipated cash-strapped to further grow this year.

However, the company thinks its private label goods, loyalty and promotional programmes, rapid expansion into cheap retailers, and cost savings will put the company in a good position.

Alexandre Bompard reiterated a target to generate a free cash flow of more than 1.7 billion euros by 2026. He said, “We look at the future with confidence.”

The company’s successful earnings and robust cash flow creation offered shareholders an 8% dividend rise to 0.56 euros per share and launch an 800 million euro share repurchase programme after one of 750 million euros in 2022 and 700 million euros in 2021.

Additionally, the company announced recurring operating income growth of 4.6% at constant exchange rates of 2.377 billion euros ($2.55 billion), which was slightly higher than the 2.34 billion euros that Refinitiv analysts compiled in 2022.

The performance reflected 1 billion euros in cost cuts and 2022 sales that grew 8.5% on a like-for-like basis to 90.81 billion euros, with market share gains in all key countries. On the other hand, Carrefour’s second-largest market in Brazil, increased by 9% at constant currency rates.

In November of last year, Carrefour pledged to accelerate its e-commerce operations, establish additional cheap stores, and reduce expenses as part of Alexandre Bompard’s plan to speed the group’s turnaround amid soaring inflation.

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