GPA/Casino - comment

GPA is holding a conference call after their Q3 results, which were released last night. At first glance the numbers are strong with top-line sales growing year on year. EBITDA margin has reduced due to inflationary pressures and an increase in costs from the higher proportion of JV/partner sales, pushing up fees. Concerning Exito, the segment they are seeking to list separately, sales grow shy c.9%, with Gross Profit growing marginally faster. However, SG&A costs have increased by 13% due to high inflation in Argentina and Uruguay, reducing Adjusted EBITDA margin by 110bps.

There is no commentary on the proposed listing of Exito, which is likely to be a topic in the Q&A during the results call.