4Q18 Trading Update Casino Group reported that group comparable sales excluding automotive fuel were up 3.6% year over year in 4Q18, versus the 3.3% rate reported for 3Q18 and just shy of the 3.7% consensus estimate recorded by StreetAccount. Total group sales were up 0.2% year over year. By region and segment, Casino Group reported the following comparable sales performances at constant exchange rates and excluding fuel:

• France comparable sales excluding Internet retailer Cdiscount were up 0.5%, slowing from 1.9% in 3Q18 and below the consensus of 1.1% growth recorded by StreetAccount. In the trading statement, management noted that social unrest was the main contributor to this slowdown.
• The weakness in France was evident across formats except discounter Leader Price: Comparable sales were up 0.5% at Monoprix, flat at Franprix and down 0.5% at hypermarkets, which included flat same-store sales at Géant hypermarkets. Comp growth came in at just 0.8% for the group’s supermarkets, which included 0.8% growth at Casino supermarkets. Leader Price led the pack with 2.1% comp growth, which was ahead of the 1.7% consensus. Convenience and other formats grew same-store sales 3%.
• Cdiscount’s comp sales were up 4.0% and net sales rose by 4.6%. The company said that Cdiscount’s gross merchandise volume (GMV) climbed by 11.9% on an organic basis in 4Q18 versus 9.3% growth in 3Q18. Management pointed to a “record Black Friday performance,” with double-digit year-over-year growth and €57 million GMV generated on Black Friday.
• Comp growth in Latin America came in at 6.0% compared to 5.5% growth in the prior quarter and the 5.6% consensus. Total reported sales fell 1.8% due to currency effects and hyperinflation.
• Management remarked on the “very good performance” of refurbished Leader Price stores as well as the development of “fresh market areas” and the success of marketing initiatives at the discount chain.
• They also noted that Monoprix’s e-commerce sales saw double-digit growth, supported by sales on Amazon Prime Now and a “sharp acceleration” in Monoprix’s online fashion business.

FY18 Update The company reported the following at constant exchange rates and excluding fuel for FY18:

• Group comparable sales were up 3.0%.
• French comparable sales ex Cdiscount were up 1.3%.
• Cdiscount comp sales were up 2.6%.
• Latin America retail comp sales were up 4.5%.
• Total group sales were down 2.4%, versus analyst expectations of a 2.8% slide.

Outlook The company offered no update to its previously published guidance for FY18, which included the following:

• The company expected organic growth in group trading profit to be more than 10% in FY18. In France, it guided that it would achieve over 10% organic growth in trading profit in the food business.
• In France, the company expected to report free cash flow from operations excluding exceptional items to cover financial expenses and dividends, enabling it to improve net financial debt.
• Management predicted a net debt reduction of around €1 billion in France by the end of 2018, thanks to self-financing and proceeds from asset disposals announced in June. It also anticipated a reduction in group net debt.

For FY18, analysts expect Casino Group to report a 4.7% decline in EBIT, yielding an EBIT margin of 3.2%. According to S&P Capital IQ, consensus calls for the company to report a 20.1% fall in adjusted net income for FY18. The company reports full-year results on March 14.