3i Group PLC's (LSE:III) portfolio update has revealed a slight slowdown in sales growth at Action, its high-performing European discount retail chain, but Citi remains firmly positive on the stock.
Like-for-like sales at Action rose 6.9% in the year to date, implying growth of around 7.7% in the second quarter so far, just below the 8% consensus and Citi’s 8.1% forecast.
The slowdown follows a stronger run earlier in the quarter that included the Easter trading period, which likely flattered results.
Citi noted that expectations for a weather-driven boost in May and June may have been a touch optimistic, despite favourable conditions.
Even so, the broker downplayed any potential share price reaction, suggesting that any weakness on the back of this update is likely to be modest.
Action remains a key driver of value within 3i’s portfolio, and Citi continues to rate the private equity group as one of its top picks in the sector.
The broker’s broader investment case centres on 3i’s consistent performance, strong NAV growth, and its strategic focus on high-quality private assets, Action being a prime example.
3i shares were flat at 4,153p.