Shares of French supermarket giant Carrefour plunged as much as 12% on Wednesday after the company cut 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 said in its third-quarter earnings report published late Tuesday.
Over the past few days, French cities have been thrown into chaos as hundreds of thousands of protesters took to the streets calling for more spending on public services and expressing discontent over high costs of living. While most protesters were peaceful, over the weekend some looted and vandalized shops, set fire to city halls and attacked police officers.
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, and a slight decline in free cash flow, reversing its previous forecast for modest growth.
Carrefour shares plunge after steady gains year-to-date.
Coming into Wednesday trading, Carrefour shares had risen 14.6% year-to-date, outperforming the French blue-chip index CAC 40, which is down nearly 4% over the same period.
The CAC 40 rose 0.2% early Wednesday, helped by soaring shares of eyewear maker EssilorLuxottica following a better-than-expected third-quarter earnings report.
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