Casino's H1 2026: Turnaround on Track, but Restructuring Overhang Looms

Positive like-for-like growth and EBITDA gains mask a balance sheet in flux as the groupe navigates a safeguard plan and expects a covenant breach.

CO.PA · Earnings Call · 2026-07-29

Turnaround in Progress

Casino, Guichard-Perrachon is in the midst of a two-front battle: an operational turnaround that is finally showing signs of life, and a financial restructuring that threatens to dilute shareholders to near zero. The H1 2026 results, reported on July 29, reveal a company that has stabilized sales and grown EBITDA, but still bleeds cash and faces a likely covenant breach by September.

The CEO Philippe Palazzi opened the call by framing the progress: “Casino turnaround is a long-term 3-phase mission, as you know, restore, recover, and grow. And we are now close to achieve the two first phases, restore and recover, and entering into the growth phase...” — Philippe Palazzi, CEO · 2026-07-29 Indeed, like-for-like net sales grew 0.4% for the half, with positive growth across most banners: Casino, Spar, Vival up 3.5%, Franprix +0.8%, Naturalia +5.7%, and Cdiscount GMV up 5.7%. The only laggard is Monoprix, down 1%, but that is a deliberate part of the strategic plan to reposition the brand. "This food repositioning is a short-term painful, obviously, but a long-term saving," Palazzi said.

The CFO Angélique Cristofari highlighted the profitability improvement: “there is a significant improvement in profitability with plus 14% growth in our adjusted EBITDA, driven by the measures to streamline the store network, the shrinkage reduction and our cost discipline...” — Angelique Cristofari, CFO · 2026-07-29 Adjusted EBITDA reached EUR 326 million, and after lease payments it doubled to EUR 109 million from EUR 55 million a year ago.

The Financial Restructuring Overhang

But the deeper story is the balance sheet. The company is navigating a financial restructuring that began in November 2025, with a safeguard plan and a battle between shareholders and creditors. Net debt stood at EUR 1.7 billion at end of June, and liquidity at EUR 713 million. The CFO warned that the leverage ratio at end of September is expected to breach the maximum threshold of 6.11x, and they will seek a waiver.

In such circumstances, the group would seek a waiver from its lenders not to use the event of default resulting from a breach of the financial leverage ratio as any means of action, again, under the relevant financing documentation.
Angelique Cristofari, CFO · 2026-07-29

The restructuring proposals could result in "significant dilution for existing shareholders," as Cristofari noted. The safeguard plan is being modified, with a target to complete the adaptation by end of second half '26.

Positioned for Convenience

The company is also betting on the convenience store format, which is outperforming the market. Cristofari cited Circana data: “the convenience stores segment continued to outperform other store formats in H1 in both value, plus 7.5%, and volumes plus 5.9%.” — Angelique Cristofari, CFO · 2026-07-29 Casino's own banners are predominantly convenience-oriented, and the store network is being streamlined to eliminate loss-making outlets. The company opened 112 new stores, closed 254, and converted 41 owned stores to franchise in the half.

At the same time, the company is investing in fresh products and quick meal solutions, with concepts like La Cantine and La Ferme rolling out. These are part of the fresh products push that is driving footfall.

In conclusion, Casino is executing a credible operational turnaround, but the financial overhang remains severe. Investors are betting on the successful restructuring more than on the retail recovery. The shares are likely to remain volatile until the safeguard plan is approved.