FNAC DARTY: Q2 sales below expectations while margins remain solid
FNAC DARTY: (BUY, Fair Value EUR104 vs. EUR108 (+31%))Q2 sales below expectations while margins remain solid
Fnac Darty reported yesterday evening disappointing sales (3% below consensus) with a group LfL growth of -1.7% for Q2. We however expect a better H2 (+0.7% LfL) than H1 (-0.5%) in the absence of many headwinds. The margins are not among investors’ current concerns while the Q2 sales figure will continue to catalyse their fears that growth will never revive. FV lowered to EUR104 vs EUR108, as we have notably cut our sales growth estimates by 50bp in average over 2018-2020, with a Buy rating confirmed given the coming partnerships which should unlock hidden value.
Fnac Darty is engaged in the leisure and entertainment, technology, and household appliances retail market in France and a player on markets in other countries where it operates such as Spain, Portugal, Belgium, the Netherlands and Switzerland. Fnac Darty also has franchise operations in Morocco, Qatar and Ivory Coast.
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