Colruyt Margins likely to have hit rock bottom, but still a long recovery ahead
Following the announcement of the Parkwind sale, a positive profit warning and the arrival of the first non-family CEO in the company's history, we have seen Colruyt's share price recover by more than 70% since the December 2022 low. Although we believe that margin pressure has reached its bottom in FY22/23, we think there is still a long way to go before Colruyt can regain its historical EBIT margin of more than 5%. To do so, the group will need to find a way to compensate for the c. € 240m increase in labour costs in a market that remains competitive. As we believe the share price performance is getting ahead of the actual margin improvement, with Colruyt now trading at a more than 30% premium versus peers, we lower our rating from Hold to Reduce but increase our TP from € 27.0 to € 29.0ps.Etablissements 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.
We are a financial services provider for several types of professional clients, each with distinct needs.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.