Colruyt - Inflation tailwind ending
In the past year, Colruyt group unlocked most of the hidden value especially through the sale of Parkwind. It also simplified the structure and created more focus within the company. This is now all reflected in the numbers. With food CPI in Belgium dropping below general CPI, the “favorable” inflation conditions will come to end. Hence, after the very strong rise in earnings in FY23/24, we expect limited earnings growth in the coming years.Given the limited earnings growth, and with most of the streamlining done, we see limited room for a re-rating. Hence, we downgrade from Buy to Hold, lowering ourEtablissements FR Colruyt is engaged in wholesale, food service, distribution of fuels, production of electricity and digital printing. Co. has three operating segments: retail, which relates to stores under Co.'s own management which directly sell to retail customers and bulk consumers; wholesale and foodservice, which supplies to wholesalers, commercial customers and affiliated independent merchants; and other activities, which operates gas stations, engaged in printing and document management and provides alternative energy.
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