Carrefour, the French supermarket giant, experienced a significant drop in its stock price, falling as much as 12% following a warning about its financial outlook. The company attributed this revision to what it described as 'an unprecedented situation in France,' referring to the recent wave of protests across the country.
These protests, driven by demands for increased public spending and frustration over the rising cost of living, have led to unrest in various cities, including incidents of looting and vandalism. As a result, Carrefour has adjusted its expectations for operating margin growth to a range of 0 to 15 basis points, down from a previous forecast of 25 basis points.
Additionally, the company now anticipates flat to slightly higher adjusted earnings per share, a significant downgrade from earlier expectations of high-single-digit growth, and it has also revised its free cash flow outlook to reflect a slight decline instead of modest growth.
Prior to this announcement, Carrefour's shares had performed well, rising 14.6% year-to-date, contrasting with the broader CAC 40 index, which has seen a decline of nearly 4%. The market's reaction underscores the potential impact of social and economic instability on retail operations in France