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Jeronimo Martins rises as food deflation shows signs of easing

By Reuters News

** Shares of Portuguese food retailer Jeronimo Martins JMT.LS rise 2.7%, pairing earlier gains of as much as 3.9%, after posting its third-quarter report

** J.P. Morgan flags early signs of food inflation recovering alongside additional upward pressures from the El Nino climate pattern building up

** The broker expects these factors to prompt JMT's Polish discount chain Biedronka to ease pricing soon, leading to a gradual sales pick-up

** Biedronka delivered strong volume growth in Q3 and mitigated the impact of significant basket deflation, posting solid sales and margin performance, the company said in the report

** Jefferies says JMT's July-September results were "exactly" in line with expectations, with the quarter likely representing the peak of Biedronka basket deflation

** Jefferies added that margin growth underpinning EBITDA delivery is a powerful offset to this deflation in the near term

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