Jumbo | Delivering, executing, growing
In our new note on Jumbo we argue that the H1 results validated once again our thesis for resilient gross margins and sustainable high-single-digit profit growth. Although H2’19 is faced with a greater freight-related headwind, we argue that Jumbo has the capacity to mitigate such cost pressures with product mix management and/or better contracted freight terms than prevailing rates. As a result, we feel that risk to our FY19 estimates (8.2% EPS growth) lies on the upside.Our note also makes the case that Jumbo’s unique combination of wide assortment, low prices and logistics infrastructure renders it relatively insulated from the e-commerce threat. In addition, we see scope for sustained positive like-for-like performance in Greece in the coming years, as we contend that the Greek consumer is likely to remain budget-conscious even as cyclical momentum accelerates. Overall, we believe Jumbo is poised to sustain c7-8% revenue growth in the next few years (2-4% LFL, 4-6% capacity-driven), translating to c9% EPS CAGR over FY19-21e. The low valuation (
Jumbo is a trading company based in Greece. Co.'s main operation is retail sale of toys, baby items, seasonal items, decoration items, books and stationery. A part of its operations is wholesale of toys and similar items to third parties. Co. and its subsidiaries have four geographical segments: Greece, Cyprus, Bulgaria and Romania. At June 30 2015, Co. operated 72 stores in Greece, Cyprus, Bulgaria and in Romania and the on line store e-jumbo.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.
Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.
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