Fnac Darty climbed on the stock market on Friday following the publication of its results for 2023, marked by a decline in operating income but strong cash generation.

At 10:35 a.m., Fnac Darty shares gained 9.6% to 26.94 euros after opening in the red. The share, at the top of the SBF 120 index, posted its biggest daily rise in three years.

The French specialist retail group reported operating income before non-recurring items of €171 million for fiscal 2023, down €60 million year-on-year against a backdrop of weak consumer demand.

"Half of this decline was due to a particularly sharp drop in business in Spain and at Nature & Découvertes in the fourth quarter," explained the group in a press release.

Last year, however, Fnac Darty succeeded in improving its operating free cash flow, which was positive at 180 million euros, compared with -30 million a year earlier, thanks to the normalization of working capital requirements (WCR) and investments in line with expectations.

In a note, Midcap analysts hailed "good news" on operating free cash flow, which they felt was above expectations.

Fnac Darty has reaffirmed its objective of achieving cumulative free operating cash flow of around €500 million over the period 2021-2024, i.e. a level of €180 million in 2024.

"We remain confident that free cash flow generation will remain solid thanks to a further improvement in WCR, lower capital expenditure and a higher share of profitable services," Barclays analysts stress in a note.

(Written by Blandine Hénault, with contributions from Stéphane Hamel)