Carrefour shares plunge after profit warning on French protests

The French retail giant Carrefour experienced a sharp decline in its shares on Wednesday, plummeting over 13% following the company's warning that violent protests across the country would negatively impact its profits. Chief executive Alexandre Bompard disclosed that around 50 Carrefour stores were ransacked during the weekend, leading to an expected reduction in operating profit this year by between 80 million and 200 million euros (US$90 million to US$225 million).

This loss could account for up to 60% of the company's operating profit during the fourth quarter, the period when holiday spending typically brings in substantial revenue, according to analysts from Jefferies.

Bompard informed France Inter radio that the company had initially been on track to meet its goals but the deteriorating social and security conditions necessitated informing investors and the market that the targets for the last quarter could no longer be achieved. The riots had also led to a surge in Carrefour's operating costs, occurring amid already weakened consumer sentiment due to rising energy prices.

Bompard noted that in the face of such extensive hardship, consumer spending, particularly discretionary spending preceding the year-end holidays, would likely be affected.

Following the incident, Carrefour is now anticipating stable or slight growth in adjusted earnings per share compared to the previous year, downgrading a previous forecast of high single-digit growth. When shares were traded around 10:30 am at the Paris stock exchange, they had fallen by 13.6% to 14.09 euros. Management was hesitant to comment on whether these repercussions would persist into early 2027, with Jefferies analysts highlighting that the scale of the impact remains difficult to accurately assess at this juncture.