Good day, and thank you for standing by. Welcome to the Carrefour Q3 2026 sales webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today, Mr. Alexandre Bompard, Chairman and CEO, and Mr. Matthieu Malige, CFO. Please go ahead.
Thank you. Good evening, everyone, and thank you for joining our Q3 sales call. I was not originally scheduled to join this call, but given the scale and the seriousness of the events in France over the past few days and their consequences for our business and our teams, I felt it was important to speak to you directly. I want to begin by addressing what happened over the weekend. Thousands of stores across France were attacked, products robbed, and for some stores, equipment was destroyed. As chairman of the French Retail Federation, I am following the situation across the sector and its consequences for retailers throughout the country. As we speak tonight, the situation keeps evolving. After Saturday's demonstration on lootings, there were more riots on Sunday, then new threats yesterday. Carrefour was directly and strongly affected. Around 50 of our stores were hit on day one.
Many were looted and the damage is considerable. In this context, our first concern is the safety of our colleagues, franchisees, and customers. Many of our teams and partners faced deeply distressing situations. I want to express my solidarity with them. Our store teams have once again shown great courage and dignity. We are supporting them and helping the affected stores resume operations as soon as it is safe. We are also working with our teams and franchise partners on insurance coverage and the claims process. The direct costs are only part of the impact. Stores that were not physically damaged are also affected. Lower customer footfall in many areas, shorter opening hours because of curfews, precautionary closures, and access difficulties are disrupting trading. This is continuing in some areas at the beginning of this week.
Going forward, we will have to increase our operating costs, notably in areas such as security and specific logistics for damaged stores. As you understand, the situation is unprecedented and the level of uncertainty is very high on operations and trading. The government announced security measures, including curfew at the local level. New demonstrations are announced notably for October 24 on November 5th. So it is impossible to get a clear picture of the situation. This happens after a cycle of more difficult consumption since mid-September on the back of higher energy prices, social unrest from high school students, and the deteriorated climate on the 2027 budget with more taxes and less subsidies. We are entering a crucial period for retail. The final months of the year traditionally account for more than a third of Carrefour France full-year recurring operating income.
We expect the severity of the security situation all over France to further weaken consumer confidence and weigh significantly on spending while imposing increasing operating costs just to keep our stores open. Our Q3 commercial momentum was solid and in line with expectations. However, the events of the past few days have changed the outlook for the final months of the year. We estimated it was our responsibility to revise our 2026 targets as set out in our press release. These revised targets keep showing profit growth versus 2025, but are at a lower level. Carrefour has a solid business model, a strong local footprint, and committed teams. Our response will be driven by clear execution priorities.
We will continue to strengthen our price competitiveness to support customer value and loyalty, accelerate the development of our convenience format on e-commerce, and pursue our EUR 1 billion cost savings plan with discipline.
We will also keep advancing Carrefour 2030, notably for store digitalization and the expansion of our growth formats. We are confident that these priorities will help us manage the current disruption, deliver our revised 2026 objectives, and continue building the group's long-term growth. I will now leave Matthieu to comment on our Q3 performance and explain the revised targets in detail.
Thank you, Alexandre, and good evening to all of you. Let me start with a few key highlights from this Q3. Group sales increased by 2.3% like-for-like following +2.1% in H1. Growth was driven by food sales up 2.7% and the positive contribution from the three core countries. These results came in a context of solid consumer momentum in Europe over the summer, despite a rebound in general inflation weighing on purchasing power, whilst food inflation remained contained. In Latin America, consumption remained under pressure and was notably penalized in Brazil by high interest rates. In France, sales grew by 1.2% like-for-like with further improvement in price competitiveness. In Spain, sales rose by 2.1%, supported by volume growth and a strong momentum in convenience. In Brazil, sales grew by 1.4% with Atacadão accelerating its volume trends way above the market. We continue to roll out our Carrefour 2030 priorities.
Carrefour kept expanding in growth formats over the quarter, notably with 89 new convenience stores in France and Spain and two Atacadão openings in Brazil. The Vusion solution is now deployed in 28 hypermarkets. E-commerce grew by 18% in Q3, and we also continue to deliver our cost savings plan in line with our EUR 1 billion target for 2026. Overall, Q3 sales were solid and in line with our expectations. As Alexandre has just explained, recent events in France have changed the outlook for the final months of the year. We have therefore adjusted our 2026 financial targets. I will explain the revised numbers in more detail at the end of the presentation. Let me take you through of Q3 numbers with the sales bridge in Slide three of the presentation. Group sales reached EUR 22.7 billion, up 3.9% on a reported basis.
Like-for-like sales grew +2.3% in line with H1. The scope and M&A effect was negative 0.7% over the quarter, mainly reflecting the sale of six hypermarkets in France, in line with the commitments made to the competition authority following the acquisition of Cora and Match. Petrol contributed 1.3 percentage points, while the calendar effect was negative 0.2%. Foreign exchange had a positive impact of +1.2% over the quarter, mainly reflecting the appreciation of the Brazilian real. Let me now turn to France. Sales grew by 1.2% like-for-like in Q3 with positive growth across all formats. The food retail market continued to grow both in value and volume, and our food sales were up 1.6%. Our price investment continued to improve our competitiveness and our price image, contributing to a two point increase in net promoter score. Trading was stronger over the summer.
Then we saw a slowdown in September. In this context of slowdown on consumption, the Carrefour anniversary campaign did not deliver the usual uplift this year. Former Cora stores grew by 7.3% like-for-like after 5% in Q2 and 2.3% in Q1. Match stores were up 3.4%. This shows continued progress. The commercial effects of last year pricing and assortment reset are gaining momentum. Cora is continuously gaining customers and market share. We look forward to accelerating the dynamic further in Q4, despite the new context. E-commerce grew by 15% with further market share gains in drive and home delivery. We opened 54 convenience stores during the quarter. Finally, yesterday, we announced that we had signed an agreement for the acquisition of Codifrance.
This transaction is part of our Carrefour 2030 plan for France, which aims to strengthen our market share, partly through tactical M&A, consolidate our leadership in the convenience segment, and improve our EBIT margin. Let's now turn to Slide five on Spain, where the market remains solid and mainly driven by volume growth. Carrefour Spain continued to post solid sales growth up 2.1% like-for-like in Q3, in line with the previous quarters. Momentum remained positive in both food and non-food, with sales up 1.8% like-for-like in food and 3.2% like-for-like in non-food. Convenience continued to be a strong growth format with like-for-like sales up 13% and continued network expansion with 35 openings over the quarter. Commercially, our omni-channel strategy is also paying off with e-commerce up 8%.
Finally, customer satisfaction continued to improve with NPS up two points in Q3, driven by our sustained commitment to price leadership in the country, supporting consumer purchasing power. Now turning to Slide six on our operations in Brazil. The Brazilian market remained challenging over the quarter. High interest rates and weaker consumer sentiment continued to weigh on purchasing power. Despite a more favorable comparison base as volumes declined mid-single digits in Q3 last year, volumes kept declining this quarter in both cash and carry and retail markets. Against this backdrop, Carrefour Brazil posted +1.4% like-for-like sales growth in Q3, with food sales growth accelerating to 2.2% from 0.7% last quarter. This was notably driven by Atacadão, which grew 2% like-for-like, accelerating from 0.5% in Q2 and negative 1% in Q1. Atacadão's volume trends clearly improved, and it accelerated its market share gains.
The adaptation of Atacadão's commercial model with a simplified assortment, targeted commercial initiatives, and the rapid rollout of the Bom Preço private label, with 300 SKUs now available, all this resonated well with customers. The retail segment posted food sales up 1.5% like-for-like. As in previous quarters, non-food sales were penalized by the discontinuation of the non-food e-commerce activity, which was not profitable. Sam's Club delivered +3.6% like-for-like growth, driven by positive volumes and an increase in active members. Moving to the other country segments on slide seven. In Belgium, Carrefour recorded the third straight quarter of improvement in like-for-like sales growth at +2.3%, outlining a solid commercial momentum driven by positive volumes. Market share was up 20 basis points over the quarter, supported by a successful combination between investment in price competitiveness, promotions, and loyalty benefits.
In Poland, the market was penalized by food deflation for the first time in 10 years. Sales were down -4.3% like-for-like. In Argentina, sales grew by 24% like-for-like. Despite continued pressure on consumer purchasing power, we consolidated our market leadership and gained market share in both value and volume. Volumes have remained positive since June, clearly outperforming the market. Now, let's turn to slide eight, which outlines the adjustments to our financial targets for the full year 2026. The social and security situation in France has deteriorated and is expected to remain under pressure for some time. We expect this to weigh significantly on consumption and disrupt operations in our stores through the end of the year, which is a critical period for our activity.
Against this backdrop, we have decided to pause or delay a number of works in our stores to be totally focused on operations and servicing our customers. Consequently, our CapEx envelope for the year is reduced by EUR 100 million- EUR 1.6 billion from EUR 1.7 billion initially. In this context, the group is adjusting its guidance for 2026. We continue to expect growth in recurring operating income. We now expect operating margin to increase by zero to 15 basis points compared with our initial target of 25 basis points increase. We now expect adjusted earnings pressure to be stable or show slight growth compared with 2025 versus our previous expectation of high single-digit growth. Finally, we expect net free cash flow to slightly decrease compared with 2025, whereas we had previously expected slight growth.
I will not comment page nine with key takeaways, which summarizes what we just discussed and is here for your reference. I thank you for your attention. Alexandre and I are happy to take your questions.
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to the first question. One moment, please. Your first question today comes from the line of Frederick Wild from Jefferies. Please go ahead.
Good afternoon. First of all, I just wanted to start by passing on my heartfelt sympathies to you and your colleagues in France for everything.
Sorry Frederick, your line is very bad. Is there any way you can speak louder so we hear you well? Thank you.
Can you hear me now any better?
It is much better. Thank you.
Great. So apologies about that. I was just starting by saying, I hope everyone is okay out there with you and your colleagues in France. To move on to my questions. First of all, could you help me understand the scale of the downgrade to EPS that is just going on there in terms of how you are thinking about sales evolving in France in Q4, how much the extra security costs are going to impact this year and all the other moving parts, just so we have got a sense of what is actually driving that downgrade. My second question is just a bit more about the Brazil and Spanish consumer dynamics, how those trended in September, and whether you have seen any meaningful change in consumer behavior in either of those two markets. If I could slip a final third one in there.
Could you just help explain a bit why France slowed down in September, and whether this was being led by Cora, and whether this would have carried on absent any other disruption in the French market? Thank you.
Thank you, Frederick. Let us come to your first question, to try to quantify the final share consequence of the events. The events are very recent, as you know, and they are continuing. What we see or analyze and due also to our experience of the last days on previous social situation, even if this one is unprecedented, the impact has several components. First, there are direct costs from stolen or destroyed goods, damage to store and equipment, additional security, repair costs, and lost sales when stores are closed. So that is direct costs. Secondly, there are broader operational effects starting with top line. We anticipate both a deterioration in the consumption dynamics due to the morale of the customers at a moment of the year where there are particular events like Black Friday or of course Christmas days.
We see a deterioration in the consumption dynamics with lower customer traffic. There are also shorter opening hours before curfews that impact top line. Precautionary closures. Four hours ago, I had to close a new commercial center suddenly, and that is the new reality today of our activity and access difficulties, including at stores that were not physically damaged. Second bulk is top line. Third is, we are also monitoring possible supply disruption and the additional resources needed to protect our sites. We cannot yet provide a detailed breakdown by cost items, as there are still many moving parts and a lot of uncertainty, but these are the main parts. Cost, top line, disruption, additional resources to open a store. It is a continuing process. We have seen continued turmoil since last Saturday. There were riots on Sunday. It was not expected at all. On Monday, there were threats.
There are new security measures every day taken by the government, including, for example, curfew in Paris and other mechanism. There are new national demonstration announced, big one, 24 October, which means Saturday, November 5th. At this point, things appear to be deteriorating with no visible sign of real improvements. That is exactly what we are. Based on our current assessment, we estimate the maximum financial risk at around EUR 200 million on recurring operating income compared with our previous objective. If it is 0.15 of increase, it would be EUR 80 million of loss of recurring operating income. The maximum risk is EUR 200 million on recurring operating income. That is where we are today with our analysis on with what is happening every day. Your second question is on Brazil and Spain.
What I can say is that the dynamic in the two countries is positive on, I would say, strong in September for different types of reasons. In Spain, the macro dynamic is very good, and we are good in this dynamic. We continue to have a positive momentum Q3, including September and including the beginning of October. Brazil is related to other facts. The dynamic of the market remains difficult due to interest rates and negative volume for cash and carry, but we gain a lot of market share, particularly on Atacadão. We have this positive momentum of this positive growth of 2% for Atacadão at the Q3, and the good dynamic, particularly a good dynamic in September, and that is what we see at the beginning of October.
Dynamic in September, in the two months is very positive for different reasons in Spain and Brazil and continuing in October. The last question was, what happened in September? I think Matthieu has explained that quite precisely. What we have seen is a good summertime. After mid-September, we have begun to see a slight decline of the consumption and the Carrefour anniversary campaign that takes place every year in September, was below last year's performance on the back of icons. Of course, it was related of the first sign of the slowdown of the consumption in September due to the situation, due to the students' events and so on. That is what we have seen in September.
That is very helpful. Thank you so much.
Thank you.
Thank you. Your next question today comes from the line of Izabel Dobreva from Morgan Stanley. Please go ahead.
Hello, good evening, and thank you for taking my questions. Regarding the CapEx guidance, I understand that a lot of this is coming out of France. Could you help us understand, should we expect you to step that up next year, as hopefully the situation normalizes, meaning that the total CapEx envelope is unchanged in the multi year view? My second question is on market share France. Could you update us on your outlook there? Because the Nielsen, which has just come out this evening, shows the market share is down 50 basis points in hypers for P10. Could you maybe comment on that figure and your expectations for the evolution going forward?
Thank you, Izabel.
Thank you very much. We need to refine our CapEx plan for next year. We have postponed, as I said, a number of projects and works. You are right, this is focused on France. It is too early. We will have to revisit. We think that the annual CapEx envelope should be relatively unchanged for next year. We will see where we are exactly at the beginning of the year. On your second question relating to the recent market share data, several things to have in mind. The first one is that in the context of consumption, as Alexandre said just a minute ago, the Carrefour anniversary campaign has not been as efficient in the hypermarket as it is traditionally. Then we have a very high historical, I am sure you saw that, which I think was roughly +30 basis points last year.
It is a lower number than we had in the previous periods, with a high historical. More generally on market share over the summers, as you know, we have the remedies that I mentioned with weigh roughly 15, 20 basis points per period. If you see between P6 and P9, we have had positive volume market share despite this negative perimeter effect, which we think is a good sign and which is consistent with what we hear from customers in terms of price image, price perception. We have been implementing a number of ways of price decrease since the beginning of the year. It is important to notice that for four periods in a row, we have been gaining market share in volume terms despite a negative perimeter effect. Then we have this promotional campaign in P10. But I think overall, the dynamic is interesting.
Thank you. I had one follow-up actually, if I may. Of the EUR 80 million- EUR 200 million that you mentioned, are you able to split that out between what are the one-off kind of costs related to shrink, to store repair, and how much of that is the expected deterioration in the like-for-like going forward?
Well, as Alexandre said, there's a number of moving parts and you see that the situation is developing. There's one number within these envelopes that we have flagged, is that the cost, the specific cost really over for the last few days, relating to merchandise, relating to repairs and so on, was in excess of EUR 10 million just for the past two, three days. That's the only number we have flagged. Then I think it's premature to detail the main bricks inside the buckets that you just described.
Okay. Thank you.
Thank you. Your next question today comes from the line of Manjari Dhar from RBC. Please go ahead.
Hi, good afternoon. Thank you for taking my questions. My first question was just a follow-up on the previous key questions on the new guidance range. I was just wondering if you could help us understand what would be the situation or what would the situation look like to get to the EUR 80 million number versus the EUR 200 million number that you commented. I suppose what should we be looking out for? My second question was just on Cora. I appreciate this good top-line progression. I was just wondering, given the developments that you're seeing now, what are your expectations for Cora for the full year now? Thank you.
Thank you for your question. It's an ongoing process, and it's an ongoing crisis, so it's always quite difficult to absolutely give you precise elements. But the difference between EUR 80 million- EUR 200 million would be linked to length of the crisis, the magnitude of the crisis, the number of security or insecurity events that will occur. For example, there are Saturday, a new demonstration, national demonstration. Without any doubt, I hope security would be better than last Saturday, but the impact on our activities would be high. So on the several that are already announced. It's difficult to precisely tell you the difference between EUR 80 million- EUR 200 million, but the two main aspects are length and magnitude and consequently impact on the sentiment of the customers.
The more, the crisis is lasting, the longer it is, the more impact it has on the customer confidence on their morale, on their willingness to consume particularly, for events like Black Friday or Christmas seasons. That's what is key for us. Concerning Cora, you have seen the dynamic, 2.5 at the first quarter, five at the second quarter, 7.5 at the third quarter. So we keep improving the commercial dynamic, and we're expecting more for Q4. We need more for Q4 to reach our objective. But the current dynamic is positive.
Thank you.
Thank you. The next question today comes from the line of Sreedhar Mahamkali from UBS. Please go ahead.
Hi. Good evening, Alexandre, Matthieu. Thanks for taking my questions. I do realize the severity of the situation, but they seem to be very large cuts, to both margins and free cash flow. Maybe just to dig a bit more into some of these topics. Maybe first one, factually, in terms of Q3 margins and cash flow, were they in line with your expectations prior to protests? Were you delivering on track to what you were thinking? That's the first question specifically on Q3 progress. Secondly, I think, again, trying to calibrate, I know it's a bit of a difficult one. But where you are sitting here now, EUR 80 million to EUR 200 million range that you've talked to, how do you scale that from the EUR 10 million that you've just talked to in the past few days? What needs to happen?
If there is any more color you could give, that will be helpful. Finally, that shortfall when we look at the group level, I think you're still saying operating profit should grow, but clearly there is a reasonably large cut on France. When we look back, is it just France or are there other regions, Europe, LATAM, are also a little behind expectations? Is there anything else to be recalibrated as we sit here?
Good afternoon, Sreedhar. I would let Matthieu precise different elements, but just to be very clear because it's important. Our Q3 commercial momentum and performance was good and in line with our expectation on that firm basis till Friday, we would have confirmed our guidance. That's where we were till Saturday morning. That's something that is very clear. On second element, I can tell you after Matthieu will precise is that this revision is only limited to France. The other geographies are in line with expectations and are in line with our objectives on guidance.
No, it's very clear. Maybe just on your second one, Sreedhar, you see it's a mix of the EUR 80 million- EUR 200 million is a mix of-
Specific moments where we have to close some stores earlier. Specific costs, as you can imagine, there is a number of security agents which are present in some of our stores. We're adapting a number of operational process to ensure the right opening. Just opening the stores is more expensive from Monday morning onwards. Then it's about business trend and morale of the consumers with the number of key days, including Saturday. Alexandre just mentioned the upcoming demonstrations. At a moment where we have a high proportion of our profit, which is generated, a negative consumption trend at this moment is obviously very negative for our bottom line. We have high level of non-food inventories that has already come into our stores, into our distribution centers. We look forward to selling them and having a good end of year campaign.
Obviously, this is more at risk today than it was a week ago.
Thank you.
Thank you. The next question today comes from the line of Xavier Le Mené from Bank of America Securities. Please go ahead.
Yes. Good evening, actually. Thank you for taking the question. Three, if I may. The first one, back on France, I'm afraid. How do you compare your network versus the competition? What I mean there is, do you think that your network is more at risk than your competitors or not? Do you see some format more at risk? Is it the hypermarket or the supermarket or the convenience store? Just to understand potentially what may happen going forward, especially on your market share. If you're more at risk than the others, something I would like to understand. Brief question on Codifrance and the acquisition that you're making. Are you buying just the sales or are you also buying brands like Coccinelle? That's the first part of the question. The second thing, do you see a risk of potentially losing some of the affiliates of Codifrance?
Or do you think that you will be able to keep a good retention here? The third one is just on Brazil. What are your expectation, actually, post presidential election? Do you expect some improvement? I know there are still a lot of uncertainty, of course, but do you have hope that things could get a bit better post-election?
Thank you for this three question. First one is of course very relevant. No doubt that we are among the main retailers in France, the most affected by this crisis due to the fact that we have the larger number of stores, 6,000, and that we are leader in convenience in urban cities. If we are leader in Paris, we are leader in Lyon, we are leader in Marseille. All these cities, of course, are strongly hit. They are not the only one to be, but they are strongly hit. Due to the number of stores we have and due to the fact that our convenience stores are strongly present in the center of the main big cities in France, of course, we are more hit than our main competitors, as you have some of the federation.
When I compare the number of stores that are affected in my competitors and colleagues, of course, the number is highly different. For some of them, it's sometimes almost zero, sometimes two or three. It's really related to the role we have on convenience stores and in the centers of cities. Codifrance first, we are very happy of this acquisition. It was quite a surprise, I think, for the market that we could be able to enter this process. It's perfectly in line with our objective to reinforce our leadership on proximity, both on franchise and on affiliation business. I think we have been quite active and it should not have been for a first but we have been quite good for, I think, to lead this acquisition. As you know, we are already operating affiliation business in France through the Proxi banner.
It will accelerate this business and strengthen our presence. Codifrance provides a skilled platform supplying approximately 3,100 points of sale with an established logistic infrastructure and experienced team. It generates approximately more than EUR 300 million in revenue and a satisfactory level of profitability. The integration will build on the continuity of Codifrance organization and business model.
Stored supply like Codifrance, of course, will not be converted to Carrefour banners, but will keep their own. Our plan is with Codifrance to progressively improve their commercial performance, help them to have better conditions, and deliver with them short-term cost synergies. On the Brazil, it is too early to tell you what we think about the election, because we follow polls quite every day, and the spread is very tiny and change day by day. We will see on Sunday what happens and the good news, whatever, will be that this uncertainty process will be over, and after, we will see what will be the next president on Sunday next.
Okay. Thank you.
Thank you.
Thank you. Your next question today comes from the line of Monique Pollard from Citigroup. Please go ahead.
Hello. Good evening. Thank you for taking my questions. The first one, it was just to come back to a comment, Alexandre, you made. I think you said the final quarter of the year accounts for a third of ROI. If I take that relationship to France, this cut to EBIT, the guidance is effectively suggesting that French EBIT could be down over 50% in terms of the fourth quarter. Just given that seems quite an extreme position, I was keen to understand as well, given your comments that the proximity stores, the convenience stores being impacted particularly, are you sharing some of the pain with the franchise partners of the elevated operating costs, or how is that working? Or is that still to be decided?
The second question was around the broader operational impact, you said, that could impact the top line, particularly as we go into peak trading. I guess the way I'm thinking about it is about 10% of the French sales are non-food, so wouldn't it largely be just in that non-food portion where you would see the kind of weaker top line play through, rather than in the Cora food sales? Then the final question I just had was around insurance. How much insurance do you have that might cover some of these impacts, and whether any you have assumed can be redeemed this year? Thank you.
Sorry. Could you tell again the last question because there was a problem on the hearing. If you can just precise the last one.
Oh, yes. Absolutely. The last question was just how much insurance you have that might cover some of the impacts from these protests and whether you have assumed any of that insurance contribution, if there is any, might be redeemed this year.
Thank you for your several question. We will precise, but on the principles, two ideas. First, as you can imagine, we are with our franchisee, with our partner. It is a small convenience store with entrepreneurs that have invested their money on. Of course, we help them to cross this very difficult crisis. The government has also announced today some aids for them, and a series of measures that would be very positive for each franchisee. At the end of the end, if they have a problem with their insurance, if they have problem with their stocks and so on, with their inventory, we will be with them. It is impossible for us just to say, Okay, now it is your store. Want to do what you have to do. No.
For each of them, we try to be sure that they have a clear answer, both by the government, by their insurance, and by ourselves. For the insurance, they do not have the same situation than for our stores. There are some franchisees, and so on, so it can be a little bit different. But if we see that they are in difficulties there because they are not covered for everything, we help them because we have to be aside them in this crisis. Matthieu, you want to precise?
On your second question on the impact, well, you are right. Discretionary consumption and typically non-food is probably more at risk. But we think that it is a mindset of consumption. You do not just buy food to feed your family. That you also have moments, you have a specific product. If the mindset for consumption is not here, we know that it has an impact. We have gone through that in some crisis previously. The relation to the profits of a specific quarter, it is mainly a fixed cost business. It is likely we are going to have more costs, as I said earlier, just for running the operations, that we are going to have more repairs for a number of specific situations with loss of volume.
So, I am not sure the impact is to be compared with the level of profitability we have in the third of the year.
Mainly relating to the big level of sales that we do at the end of the year. On insurance, we do have some insurance of sales, but you can see that a number of what we have described is not covered. If you just have slower sales because of the mindset, if you have to close earlier your store because there is a risk to the security or there is a curfew, which is decided by the government, then all this will not be covered. When you have losses, we have some thresholds, which are not covering for 100%. So, you know how it works. So a little bit will be covered, but we think most of the impact, will hit our P&L. That is why we are adjusting our numbers tonight.
I'm sorry, just to follow up on the insurance point, though. Is the little bit that's covered from the insurance included in this guidance, or would that be additional when it comes through?
No, so well, it's a net. The impact is a net. Then again, the situation is developing as we speak. So what exactly would be the proportion that would be covered by insurance? It's too early to determine. It will depend on the event, on the shape and duration and magnitude that the crisis takes.
Understood. Thank you.
Thank you. The next question today comes from the line of Rob Joyce from BNP Paribas. Please go ahead.
Hey, good evening. Thanks very much. I've got three questions as well. One was a quick follow-up just on Monique's first point. Am I correct in hearing that the impact you're estimating will be between about a quarter and a half of the French EBIT in 4Q, given you comment on a third of the EBIT in the fourth quarter? The second one is, just in terms of thinking about this on a sort of look forward basis into 2027, given your comments on the third quarter trending in line, should we basically just think of the kind of two three fifty implied in the EBIT guidance as a base to build from next year? So effectively look at the fourth quarter impact as an entirely a one-off in France. The final one is, I'm just trying to square the EBIT guide with the EPS guide.
If I take the low end of the EBIT range, I'm getting to a I can see the slight increase in EPS year-over-year, potentially. But if I take the worst-case scenario, we'll be getting EPS down mid-single digit, maybe slightly more. I'm just wondering if I'm getting something wrong or if something changed below the line since we last spoke. Thank you.
Well, thank you very much, Rob. On your first one, I think we've pretty much said it all. So, we've been clear that the impact from EUR 80 million- EUR 200 million is purely focused on France. The rest is running well and unchanged. I think I was clear in answering to Monique earlier. On your second question, well, again, we think it's a specific situation. You didn't ask the question about our midterm guidance, but clearly our midterm 2028 and 2030 guidance is unchanged, because we think it's a specific situation, which does not modify our trajectory. I think it's an important point. Then it will depend on what's the dynamic for the business at the beginning of the year. What is one-offs, we think it should be many one-offs. So we'll see. But clearly it doesn't change the medium-term perspective. That's important.
Then on the combination computation from recurring operating income to EPS, make sure you get your financial result right. Maybe it's a little too big in terms of financial cost. Again, in comparison with last year, we said that we would get that 75% of the benefit from refinancing Brazil in 2026. So I just want to make sure that you reflect that. The numbers, I think they were clear. We guided to a full year impact of the refinancing of EUR 180 million, which was roughly 12% of difference in interest rates applied to roughly EUR 1.5 billion of debt that has been refinanced with 25% of the impact occurring in 2025 and the remaining 75% happening this year. So clearly—
Okay
—financial charge should be below EUR 500 million for the year. That is probably something that was missing in your model.
Okay. Finance charge is below 500 for the year.
Yeah.
Okay. Thank you.
Thank you. Your next question comes from the line of François Digard from Kepler Cheuvreux. Please go ahead.
Good evening. First, if I may, thank you very much for your transparency in this very difficult period we are all facing in France. That is very appreciated. Then I have a few questions. You mentioned in September, a kind of slowdown in the second part of September. You mentioned students' protests. I was a bit surprised. Is it not also correlated on more impacted by the energy costs increase and their impacts on purchasing power? Then I have a second question. Could you provide some details on the looted stores? Because I was in the impression that proximities on a few supermarkets, for up to 50 stores have been impacted. But I am surprised to see in some quotes of Alexandre in the press that some hypermarkets have been targeted too, which is a bit surprising because they are not precisely in the urban areas.
If you could elaborate on that and just reassure me on the fact that your banner has not been specifically targeted following past boycotts or these kind of things. Thank you.
Merci, François, for your words. We really appreciate. Of course, you know perfectly France, so you have seen how September has evolved with many negative aspects related to, of course, energy costs, the question of the price of oil, the question of the purchasing power, the debate on the budget situation, the risk of a financial crisis on all that. And there were also, as I mentioned, the first student demonstration. So that is the series of events, mainly in the second part of September, that have really affected the climate of September. Considering your question on the 50 stores, so the main stores, of course, the main bulk is the really urban stores, which means not only convenient, but also Carrefour Market. Let us take an example.
Sunday morning, the first two stores that I have seen very early in the morning was a proximity store in and the Carrefour Market in Rue de Lyon. And no, different formats have been impacted, but also we have seen many closures of our hypermarkets. As you know, we have a lot of hypermarkets that are based on very peri-urban areas. They have been very impacted in 2023, as you probably remember. So that is how we base our network. We are stronger in this area, and we know that this area are more affected these days by the crisis. So that is why at the end of the end, because of the strong presence we have in the center of the cities and the strong presence we have in the peri-urban, in the banlieue of the big cities, we are more impacted.
Then I think we were clear, François, on, you know that there's been a few stores but the impact is obviously much broader because we think it's a change of consumption trends and of conditions of operating our stores with more cost. I think we've covered that today. I do not think that we were particularly or specifically targeted in any way.
Thank you very much and good luck for the coming weeks.
Thank you, François.
Thank you. We will now take our final question for today, and the final question comes from the line of Geoffroy Michalet from Oddo BHF. Please go ahead.
Thank you, gentlemen, for taking my questions. I have three for you. First one, any impact that can be foreseen on the working capital line for this year? I think we are in the period where we are building inventories ahead of Black Friday and Christmas season. Is there a stress there? The second question is the fact that you mentioned that it is probably a one-off effect for 2026, but don't you fear than what you described on the debate on oil cost, purchasing power, budget situation, risk of a financial crisis might potentially be prolonged into early 2027? The third question is, do we have any development on the cyberattack of the fridges that you had to cope with, along with industry players as well? Are there also any insurance related to that? Thank you very much.
Thank you, Geoffroy. I think you're right. It's a good question on working Cap. We have included that in the revision of the guidance on the net free cash flow objective. There is a risk that if we have lower sales dynamics at the end of the year, there could be an impact. We think it would be limited, and it's been factored into the revision of the guidance for 2026. For the two other questions. First, the cyberattack last Monday. I would say this cyber incident had a limited operational impact on Carrefour. It affected approximately 80 franchise supermarkets. No hypermarkets were affected. It's not material for us, but of course, we take it very seriously. We invest year after year, big CapEx on cyber. We have hired experts. We are working very forcefully on all our processes.
Today, we have a board, and this subject was one of the key subjects we presented to the board. It's something on which we are working, of course, a lot, trying to be the most professional and the most prepared we can be. On your question about, I would say, perspective. I will take it a little bit in a different way if you don't mind. We are crossing a strong crisis in France, security and social crisis that started a few days ago, and that is hitting retail and mainly Carrefour very strong. The other elements you mentioned, energy costs, oil costs, purchasing power situation of public debt, and so on. I would say our model has proven the first nine months of the year that it was capable to face it positively.
That's why today, it's a bit difficult for us to see that the big efforts we have done in France in the nine months to face all these negative elements and to follow our objectives are damaged a little bit by the security crisis. The different elements you mentioned, they are part of our business today. When you do retail in France today, you know that there is problem of purchasing power in the country. You know there is a problem of public finances, question of debts, unemployed, crisis of the country, and political instability. But until Saturday, on this unprecedented security crisis, we were capable to face them and to have a good commercial dynamic and to transform this good commercial dynamic into improvement of our profitability.
The conviction we have, and we are building this model day after day, is that when this security crisis will be over, we will come back to the previous situation. We don't have any doubts with that. That means that our model is resilient, capable to answer these different crises.
Thank you very much.
Thank you. Really appreciate the discussion with you.
Well, many thanks. It's time to close. So I'd like to thank you for your time and attention. Obviously, Sébastien, the rest of the team is available for any follow-up you may need.
We give you rendezvous for our same day IPIR's on November 17th.
Thank you very much.
Thank you.
Have a good evening. Bye-bye.
Bye-bye.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.