Judging from the lower margin/flattish earnings performance in H1 and management comments in the conference call that followed, we conclude Jumbo is playing defense. Threats being competition, political turmoil, weak disposable incomes, geopolitical uncertainty. Allies being the weaker USD, lower freight costs, and stronger wholesale trading.

July trading showed sales growing at +9% yoy with the YTD rate maintained at +8% yoy after yet another month. Greece was up +10% yoy in July (7M +9%), Cyprus +13% (7M +8%), Bulgaria +2% (7M +2%) and Romania +7% (7M +7%). Still no full year guidance. What stands out is…

Management confirmed it is experiencing several positive catalysts YTD: Q1 sales are +8% yoy; freight rates are down (and should be heading lower); the EUR/USD rate is +10% stronger; and Chinese products should be getting cheaper for non-US buyers. This explains why it will propose not to pay a dividend out of 2024, favoring buying back shares and/or stocking up inventory as an alternative use of money for shareholders. We expect the second option will be the main use of cash given shares are trading above the max buy-back limit of E27.2, and management has no intention of raising it.

January trading showed +11% yoy sales growth, a (double-digit) rate not seen since May 2024, with Greece +15% yoy, CY +3%, BUL +2% and ROM +5% yoy. Jumbo said a good part of this growth came from sales to franchisees, which operated 3 more stores vs Jan last year (o/w one in Israel). These are in 7 countries north of Greece*. We are left guessing their exact impact.

This is our BoP Greek equities briefing. We have not made many changes compared to our semi-annual one in July: we downgraded Alpha and Helex; and upgraded Eurobank. Plus, we re-visited GEK, reiterating OI and replacing its soon-to-be-delisted RES subsidiary, Terna Energy.