This article first appeared on GuruFocus .
Release Date: October 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Group sales increased 4.8% to EUR27.8 billion, with EBITDA growing 7.6% to EUR1.9 billion and margin expanding 18 basis points to 7%.
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Biedronka achieved impressive volume growth of 5% despite significant basket deflation, demonstrating strong competitive positioning.
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Ara maintained strong momentum with sales up 37.9% in euros and like-for-like growth accelerating to 11% in Q3.
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All banners improved EBITDA margin through mix management, cost discipline, and efficiency initiatives.
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Group opened 172 stores and maintained a solid net cash position of EUR118 million (excluding IFRS 16), preserving financial flexibility.
Negative Points
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Biedronka faced severe basket deflation of nearly 7% in Q3, putting pressure on sales value and profitability.
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Like-for-like growth for Jeronimo Martins SGPS SA was only 0.8%, with Biedronka's like-for-like declining 0.4% in the nine months.
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Rising fuel-related costs, particularly transport, increased double-digits, impacting operating expenses.
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Cash flow before dividends was negative at EUR183 million due to working capital pressures from deflation and promotional dynamics.
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Challenging comparison base and mandatory store closures during Christmas in Poland may constrain Q4 performance.
Q & A Highlights
Q: What is the outlook for Biedronka's basket deflation and like-for-like sales in Q4, given the soft comparison base and the challenging volume comparison? A: The CEO stated that food basket deflation in September was slightly lower (less negative) than the Q3 average, but the dynamics in the marketincluding food PPI deflation, intense competition, and price-sensitive consumersmake it difficult to inflect in Q4. She believes basket inflation will probably slightly improve, but the Christmas and New Year period is crucial, and Biedronka faces a very challenging volume comparison after performing very well last year. The teams will do their best to deliver the best like-for-like possible, though it is difficult to predict at this stage.
Q: Can you provide more details on the margin mechanics at Biedronka in Q3 and whether positive margins can be expected in Q4 despite the one-off annualization? A: The CEO explained that the margin mix and promotional dynamics from Q3 should be maintained in Q4. However, there was a one-off in Q4 last year that will not repeat, creating a more challenging gross margin comparison. She noted that if Biedronka can maintain margins in the current circumstanceswith significant food basket deflation, competitive pressure, and muted consumersit would be an impressive performance. Some Q3 margin drivers will carry into Q4, but the comparison base is tougher.
Q: What is driving ARA's strong volume growth and like-for-like performance, and how sustainable is this going forward? A: The CEO attributed ARA's volume growth to market dynamics and the banner's ability to provide the best opportunities, particularly through promotions designed to drive volumes. Colombia remains challenging with low incomes and high inflation, but ARA's relevant offers to Colombian consumers have resonated. She added that the company expects ARA to continue growing sales and densifying its stores, with like-for-like expected to remain quite strong as many stores enter the like-for-like base through expansion.
Q: What was the basket deflation figure in Q3, and do you maintain the store opening guidance for Biedronka despite the slower pace year-to-date? A: The CEO confirmed that Q3 basket deflation was above 6%, almost 7%, describing it as a very difficult environment and praising Biedronka's volume growth as impressive. On expansion, she said the company expects to accelerate openings in Q4, which is not unusual for its banners (including ARA), and reiterated the outlook for the year without changing guidance. The slower pace year-to-date is a calendar effect rather than a change in ambition.
Q: What needs to change at the market level to move from deep deflation to a more rational pricing backdrop, and can you give tangible examples of price mix and operational efficiency improvements? A: The CEO noted that suppliers across the supply chain are also trying to drive volumes, which puts pressure on prices even as production costs (labor, commodities, fuel) rise. She said nobody wants to be the first to increase prices, and the inflection point is difficult to predictlikely not until the end of the year and possibly overlapping into Q1. On efficiency, she cited photovoltaic panel installations (now in five DCs and several hundred stores, saving over 10% on energy) and the stabilization of the new DR system implemented in October last year. On price mix, deflation allows consumers to buy more value-added products without feeling they are paying more, supporting gross margin.
Q: How should we think about working capital movement and cash flow in Q4, given the negative cash flow before dividends in the first nine months? A: The CEO said Q4 is expected to be a positive contributor to cash flow due to business seasonality. However, the slowdown in sales value and heavy promotional activity have put pressure on working capital and cash generation. She emphasized that this reflects the dynamics of the business under current circumstances rather than a structural issue.
Q: Is the additional EUR40 million contribution to the Jeronimo Martins Foundation a one-off or a recurring cost? A: The CEO confirmed it is a one-off, intended to reinforce the foundation's resources for exceptional events like Storm Kristin in central Portugal and the earthquake in Colombia. It is not intended to be repeated in following years.
Q: What is your view on the Polish consumerif inflation returns, will they be able to spend more on food, and what are the key dynamics? A: The CEO said the Polish consumer has available income and increased savings, and has been able to buy more for less due to deflation. If food inflation returns, she believes the consumer will still be able to buy products without needing to refrain, though the balance between volumes and trade-up is difficult to foresee. Competition remains intense, with pressure from labor and fuel-related costs, but she does not expect a significant trade-down or different consumer behavior if prices rise.
Q: Have you already experienced the impact of rising fuel costs, or are there further headwinds expected? A: The CEO confirmed the company is already experiencing fuel cost impacts, particularly in Europe (Portugal and Poland), mainly on transport. She noted double-digit increases in transport costs and said the outlook depends on geopolitical developments, which are very difficult to predict and remain highly uncertain.
Q: Can you quantify how much of Biedronka's 5% volume growth came from more items per basket versus more customer visits, and are suppliers asking for higher prices? A: The CEO said the 5% volume growth is basically volume and mix driven, not primarily from increased visit frequencycustomers are buying more and with an improved mix. On suppliers, she noted that in some fresh products (such as meat) there was excessive production, leading suppliers to push for volumes and lower prices. While suppliers may eventually ask for higher prices given rising production costs, they know this is a difficult balance if they want to drive volumes, so significant and rapid price increases are unlikely.
Q: What wage increase do you plan for store staff in 2027 compared with 2026? A: The CEO said the company typically discloses wage increases at the beginning of the year and would not reveal the figure at this stage. She noted the labor market in Poland is quite tight, so Biedronka must be competitive not just on prices but also on labor, and will consider an increase that does not take purchasing power away from colleagues.
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For the complete transcript of the earnings call, please refer to the full earnings call transcript .
