Carrefour cut its full-year profit forecast after unrest in France is disrupting its stores and weighing on consumer spending. Its shares fell more than 13% on Wednesday, the day after the company published third-quarter results.
Carrefour shares plunged over 13% on Wednesday after the French supermarket group lowered its full-year outlook. The company blamed what it called, according to CNBC, "an unprecedented situation in France". Shares were last seen down 13.6%, at the bottom of the Stoxx 600 index.
Protests disrupt stores and spending
Hundreds of thousands of protesters took to the streets over the past few days, calling for more spending on public services and expressing discontent over high costs of living. Most protesters were peaceful, but over the weekend some looted and vandalized shops, set fire to city halls and attacked police officers.
Carrefour warned that the unrest is disrupting store operations and weighing on consumer spending, which was already strained by rising energy costs, ahead of the crucial year-end shopping season.
New guidance replaces earlier targets
Carrefour now expects operating margin growth of just 0 to 15 basis points, down from a previous expectation of a rise of 25 basis points. It also forecasts flat to slightly higher adjusted earnings per share, compared with earlier expectations for high-single-digit growth.
The company also expects a slight decline in free cash flow, reversing its previous forecast for modest growth.
Third-quarter sales held up
Third-quarter like-for-like sales growth at constant exchange rates came in at 2.3%, in line with FactSet expectations and slightly above growth during the first six months of the year. France accounted for 11.9 billion euros ($13.4 billion) in sales, just over half of total revenues, and sales there grew 1.2% in the quarter.
Carrefour shares are up about 2.5% year-to-date, while the CAC 40 is down nearly 4% over the same period.
Source: CNBC
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