Shares of French supermarket Casino tumble after profit warning

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The Casino supermarket logo is pictured in Paris, France, March 3, 2021. REUTERS/Gonzalo Fuentes

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PARIS, Jan 31 (Reuters) – Shares of French supermarket Casino tumbled on Monday after the company slashed 2021 profit outlook for its retail business in France, blaming a bigger-than-expected drop in the food market French in the fourth quarter.

Casino shares fell 7.2% in early trading, and Casino’s woes weighed on its biggest domestic rival Carrefour (CARR.PA), whose shares also fell 3.2%.

Analysts at investment bank Jefferies said they will now focus on “how earnings pressures translate into cash flow and leverage,” with Casino reporting its annual results Feb. 25.

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The group, which previously forecast higher profits this year in France, said it now expects lower 2021 EBITDA (earnings before interest, tax, depreciation and amortization) from its retail business. in France by 1.7% to approximately 1.28 billion euros. ($1.43 billion).

Jefferies analysts pointed to Casino’s high exposure to convenience stores in city centers and particularly in the Paris Ile-de-France region, where Jefferies had suffered from negative market trends.

“The combination of continued depressed tourist visits and a recovery in out-of-home food consumption in late 2021 was likely a toxic combination for Casino Monoprix/Franprix critical profit generators,” Jefferies wrote. ($1 = 0.8953 euros)

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Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

Our standards: The Thomson Reuters Trust Principles.

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