ATAAY - Atacadão: A Great Brazilian Cash And Carry Worth Monitoring

2024-02-16 04:29:27 ET

Summary

• Atacadão, a Brazilian cash and carry retailer owned by Carrefour S.A., operates throughout Brazil, offering a mix of food and non-food products, convenience stores, pharmacies, and gas stations.
• ATAAY faces challenges such as declining food inflation, high indebtedness, and intensified competition.
• Despite the conversion of BIG Group stores and synergy gains, high costs and delays in store maturation have pressured Atacadão's margins, impacting its profitability.
• Looking ahead to 2024, Atacadão anticipates increased profitability driven by factors like Brazil's food inflation recovery, lower interest rates, store maturation, and CapEx reduction.
• The Company's valuation, while stretched compared to historical averages, is aligned with domestic peers and poised for profit growth, suggesting a potential convergence in profitability by 2024.

Atacadão S.A. ( ATAAY ) is a Brazilian cash & carry retailer operating throughout Brazil, with Carrefour S.A. ( CRRFY ), based in France, as its controlling shareholder. The group also operates convenience stores, pharmacies, and gas stations and offers credit lines.

In 2014, Brepa Comércio e Participação Ltda, which controlled Grupo Carrefour Brasil and Atacadão, merged into Atacadão S.A. The latter became a mixed holding company responsible for operational activities....

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