3i Group PLC (LSE:III) reported a moderation in like-for-like (LFL) sales growth at Action during Q3 2025, citing a weaker consumer environment in France and Germany, along with unrest in France, as key factors. Shares fell following the announcement. The company also confirmed a transaction to increase its stake in the retailer.
In a portfolio update ahead of its Capital Markets Seminar, 3i said year-to-date sales at Action reached €10.9 billion as of 21 September, below its prior expectation of €11.2 billion for the first nine months. This represents an 18% increase year-on-year, slightly above RBC Capital Markets’ forecast of 17.5%. LFL sales growth was 6.5% year-on-year, just above RBC’s high-end estimate of 6.4%. Growth had been 6.8% at the end of August, signaling a “softening in September so far.”
“We note a softer exit rate in September, owing to recent general strikes and unrest in France. We view Action as a high-quality retailer with significant long-term growth potential, but the degree of outperformance has narrowed this year,” the brokerage said.
3i attributed the weaker results to “weaker overall consumer spending in France and Germany,” which affected year-to-date outcomes. Operating EBITDA for the last 12 months to the end of period nine in 2025 is expected to reach about €2.3 billion, in line with forecasts. Cash balances stood at €758 million as of 21 September.
Action added 207 net new stores year-to-date, exceeding the target of 202, and remains on track to deliver or surpass 370 net new stores in 2025. Expansion includes seven new stores in Switzerland and the retailer’s first store in Romania.
In a strategic transaction, 3i agreed with GIC to acquire a 2.2% stake in Action in exchange for issuing 19.9 million new ordinary shares in 3i Group.
3i’s broader private equity portfolio also showed positive momentum, with Royal Sanders performing well. Since its July update, the group sold MAIT, generating gross proceeds of £143 million—a 30% premium over its March 2025 valuation—and delivering an estimated internal rate of return of about 27%.
“Prior to today, 3i was trading at a c.29% premium to our FY26e NAV/share forecast, ahead of its c.23% average, which we think reflects an increasing contribution from the highly rated Action business,” RBC noted. “The implied CY26e P/E for Action is c.33x. In our view, this looks fair for a well-managed business, but with more limited potential upside near-term.” RBC maintains a “sectorperform” rating with a price target of GBp 3,650.
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