Carrefour Cut at Bernstein on Concern of New CEO's Initial Steps
Carrefour’s recommendation lowered to underperform from market-perform, wrote Bernstein analysts led by Bruno Monteyne, who cited actions taken by the new CEO Alexandre Bompard as being “either ultra-limited or concerning.”
- “The new CEO added an extra layer of a 14-strong executive committee, adding more costs, duplication and centralization,” analysts write in note to clients. Other points of concern:
- The only communication to investors was to delay communication
- A non-food sourcing deal with Fnac, bolstering non-food rather than reducing non-food exposure
- Extended Sunday opening hours driving potentially extra 0.04% of sales
- Board used same flawed incentive scheme that paid previous CEO EU7m p.a. for the last 2 years in cash
- Current re-rating of shares “is based on wishful thinking: that politicians protecting French farmers will protect Carrefour from price competition; that Ocado/Casino deal makes Amazon/Carrefour deal more likely; that huge cost savings can come from labor savings in Franc