Carrefour shares drop after guidance cut on France riots

Carrefour Shares Tumble 10% After Annual Earnings Guidance Cut Due to France Riots

Carrefour's Earnings Outlook and Market Reaction

Oct 21 (Reuters) - Shares in Carrefour fell in early trading on Wednesday after the French retailer cut its annual earnings target, warning that riots and looting in France could reduce operating income by as much as €200 million ($224 million).

Stock Performance and Market Indices

The stock was down around 10% as of 0726 GMT, the weakest performer both on the Paris blue-chip and the wider pan-European STOXX 600 indices.

It was on track for its biggest one-day decline since March 2020.

Reasons Behind the Earnings Cut

Impact of Riots and Increased Costs

The company lowered its full-year earnings outlook on Tuesday, citing higher costs and store disruptions linked to recent unrest in France. Chief Financial Officer Matthieu Malige said the total impact could amount to between €80 million and €200 million of operating income.

Analyst Reactions and Broader Implications

Analysts said the downgrade raised questions whether the group's challenges were confined to France.

JPMorgan's Perspective

JPMorgan said in a note the update highlighted "a lack of underlying momentum" across Carrefour's key markets, pointing to weak volumes in France, Spain and Brazil.

Additional Information

($1 = 0.8913 euros)

(Reporting by Hugo Lhomedet, editing by Anna Pruchnicka)