Shares of French supermarket giant Carrefour fell as much as 12% on Wednesday following the company’s revision of its full-year profit forecast, citing “an unprecedented situation in France.”
“In light of the worsening social and security situation, the Group considers that consumption trends and operating conditions in France are facing a deterioration,” the company stated in its third-quarter earnings report released late Tuesday.
Over the past several days, French cities have experienced significant disruption as hundreds of thousands of protesters demonstration against high living costs and demand increased public spending. While most of the protests remained peaceful, some incidents included looting, arson attacks on municipal buildings, and confrontations with police.
Carrefour now forecasts operating margin growth between 0% and 1.5%, down from the previously anticipated 25 basis points. The company also projects flat or slightly higher adjusted earnings per share, contrasting with earlier expectations of high-single-digit growth. Free cash flow is now expected to decline slightly, reversing its prior forecast of modest growth.
Carrefour shares plunge after steady gains year-to-date.
Before Wednesday’s trading, Carrefour shares had gained 14.6% year-to-date, outperforming the French blue-chip index CAC 40, which has declined nearly 4% over the same period. The CAC 40 rose 0.2% early Wednesday, buoyed by gains in eyewear manufacturer EssilorLuxottica following stronger-than-expected third-quarter earnings.
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