Carrefour (CARR)

Equity Research 23 July 2026 | 5:24PM BST

Carrefour (CARR.PA): First Take: 2Q26 LFL beat,1H26 EBIT 3% miss driven by non-core/centrals; FY26 guidance unchanged

News: Carrefour reported 2Q26 results with group cFX sales growth +1.8% and Richard Edwards | sales incl. VAT of €22.71bn (company-compiled consensus €22.74bn). Group LFLs Goldman Sachs International (ex-fuel and calendar effects) increased +1.9% (consensus +1.6%), split France Ben Williams +1.0% (consensus +0.8%), Spain +2.2% (consensus +1.9%), Brazil +0.4% (consensus | +0.1%) and Other countries +8.0% (consensus +6.5%). Goldman Sachs International

Hamish Bogdan France LFLs were split Hypermarkets +0.8% (consensus +0.1%), Supermarkets +1.0% | (consensus +1.0%), and Convenience/Other formats +1.1% (consensus +2.6%). For Goldman Sachs International Other Countries, Belgium +1.3% (consensus +0.5%), Poland -5.8% (consensus -3.0%), and Argentina +23.5% (consensus +20.0%).

1H26 group underlying EBIT was €757mn at a 1.9% margin (consensus €779mn) split France €300mn at a 1.5% margin (consensus €312mn), Spain €177mn at a 3.3% margin (consensus €171mn), Brazil €359mn at a 4.0% margin (consensus €346mn), Other Countries -€34mn at a -0.8% margin (consensus -€18mn) and Global functions -€46mn (consensus -€30mn). 1H26 group adj. EPS was €0.49 (consensus €0.45) with free cash flow of -€1.99bn ex. Italy, down €64mn yoy.

n >25bps adjusted EBIT margin expansion (Visible Alpha Consensus Data +24bps to 2.9%) n High-single-digit growth in adjusted EPS (consensus c.+10% to €1.76) n €1.0bn of gross cost savings expected to be delivered during the year n Free cash flow to increase versus FY25 excluding Italy (FY25 FCF: €1.565bn) n Capital expenditure of c.€1.7bn (from c.€1.8bn due to disposal of Romania; Visible Alpha consensus of €1.78bn)

What does it all mean? All else equal, the above is consistent with FY26E consensus recurring EBIT of c.€2.35bn.

Valuation: Our DCF-derived 12-month price target is €17, which implies a c.9.5x FY27E P/E (11x EV/NOPAT). We are Neutral rated.

Key risks to our view that could make us more positive/negative:

Downside risks: (1) French grocery markets remain among the most competitive in Europe, which means profitability has been historically low, and there may be greater

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Goldman Sachs Carrefour (CARR.PA)

need to reinvest cost savings than we forecast, especially to offset share gains from other players; (2) As food input cost inflation rapidly falls in Europe, there remains risk around an irrational market forming, with price leaders cutting ahead of costs in order to gain share, leading to margin pressure; (3) Depreciation of the Brazilian R$ would provide a material translational FX headwind as Carrefour Brazil is c.40% of consolidated EBIT for Carrefour.

Upside risks: (1) a material recovery in the value of the Brazilian R$; (2) a much greater structural shift of food consumed out of the home, into the home; (3) less of a long-term negative impact on hypermarket traffic than has historically been the case; and (4) volumes recovering sharply as elevated food inflation abates.

CARR.PA 12m Price Target: €17.00 Price: €16.65 Upside: 2.1%

Neutral GS Forecast 12/25 12/26E 12/27E 12/28E Market cap: €11.2bn / $12.7bn Revenue (€ mn) 84,025.0 85,876.0 87,692.9 89,581.7 Enterprise value: EBIT (€ mn) 2,158.0 2,359.8 2,483.7 2,591.1 €20.0bn / $22.8bn EPS (€) m ADTV: €38.8mn / $44.8mn EV/EBITDA (ex lease,X) 3.1 3.5 3.3 3.1 France P/E (X) Europe General and Food Retail Dividend yield (%) 7.4 6.1 6.4 6.7 M&A Rank: 3 FCF yield (%) 7.4 8.9 8.3 8.8 Leases incl. in net debt & EV?: CROCI (%) Yes N debt/EBITDA (ex lease,X) 1.0 0.8 0.7 0.6

6/25 12/25 6/26E 12/26E EPS…