French supermarket giant Carrefour cut its full-year profit forecast on Wednesday, citing "an unprecedented situation" in France as hundreds of thousands of protesters took to the streets demanding more public spending and protesting high costs of living [1]. The unrest, which included looting, vandalism, arson at city halls, and attacks on police officers over the weekend, prompted the company to warn that "consumption trends and operating conditions in France are facing a deterioration" [1]. In response, Carrefour's shares plunged over 13% (down 13.6% to be precise), placing the stock firmly at the bottom of the Stoxx 600 index [1].
The company significantly downgraded its guidance across multiple metrics. Carrefour now expects operating margin growth of just 0 to 15 basis points, down from a previous expectation of 25 basis points, and forecasts flat to slightly higher adjusted earnings per share compared with earlier expectations for high-single-digit growth [1]. Additionally, the company reversed its previous forecast for modest free cash flow growth, now expecting a slight decline [1]. The supermarket giant warned that the unprecedented unrest is disrupting store operations and weighing on consumer spending, which is already strained by rising energy costs, ahead of the crucial year-end shopping season [1].
Despite the sharp single-day decline, Carrefour shares remain up approximately 2.5% year-to-date and are still outperforming the French blue-chip CAC 40 index, which is down nearly 4% over the same period [1]. In third-quarter results, the company reported like-for-like sales growth at constant exchange rates of 2.3%, in line with FactSet expectations [1]. France accounted for 11.9 billion euros ($13.4 billion) in sales, representing just over half of the company's total revenues, with French sales growing 1.2% in the third quarter [1].
CONCLUSION
Carrefour's sharp 13.6% stock decline reflects significant concern about the impact of French social unrest on consumer spending and store operations during the critical year-end shopping season. The company's downward revision of profit guidance—from high-single-digit EPS growth to flat-to-slightly-higher growth—signals management's view that the disruption represents a material headwind to near-term profitability. While the stock remains up year-to-date, the market has clearly repriced the company's earnings potential based on this unprecedented operational challenge.