By PARIS (Reuters) -Shares in French supermarket retailer Casino slumped on Monday after the company cut the 2021 profit outlook for its French retail operations, blaming a higher-than-expected decline in France’s food market in the fourth quarter.
Casino’s shares were down 7.2 percent in early session trading, and Casino’s woes weighed on its larger domestic rival Carrefour (PA:CARR), whose shares also fell 3.2 percent.
Analysts at investment bank Jefferies analysts said their focus would now be on “how profit pressures are translating into cashflow and leverage pain”, with Casino reporting its annual results on Feb. 25.
The group, which previously eyed a profit rise this year in France, said it now expected a decline in 2021 EBITDA (earnings before interests, taxes, depreciation and amortisation) at its French retail operations of 1.7% to around 1.28 billion euros. ($1.43 billion).
Jefferies analysts highlighted Casino’s strong exposure to convenience stores in city centers and notably in the Paris Ile-de-France region, which Jefferies had suffered negative market trends.
“The combination of still depressed tourist visits and a recovery in out-of-home food consumption late in 2021 was likely a toxic combination for Casino’s critical profit generators Monoprix/Franprix,” wrote Jefferies.($1 = 0.8953 euros)
Shares in French supermarket retailer Casino slump after profit warning
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