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Carrefour shares plunge 12pc on full-year profit warning

Carrefour signage at The Hub Karen Mall where it is the anchor tenant. PHOTO | KARI MUTU | NMG
Carrefour signage at The Hub Karen Mall where it is the anchor tenant. PHOTO | KARI MUTU | NMG  

Shares in Carrefour plunged by more than 12 per cent on the Paris stock exchange on Thursday after the French supermarket group's first-half results came in lower than expected and it warned that full-year profits would fall by around 12 per cent.

At around 0725 GMT, Carrefour's shares were showing a loss of 12.3 per cent at 17.10 (about Sh2,103.3), while the overall market was higher.

The plunge in Carrefour's share price dragged down the rest of the retail sector, with shares in rival group Casino down by more than 5.0 per cent.

Late on Wednesday, Carrefour, the world's second-largest retailer, had warned that 2017 operating profit would fall by around 12 per cent and cut its sales growth target.

That was after the group posted a steeper-than-expected fall in first-half earnings.

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"Our 2017 results will be impacted by our first-half performance and an operating environment that will remain difficult in the second half in some countries," said Carrefour's new chief executive Alexandre Bompard.

In the six months to June, Carrefour booked a bottom-line net profit of 78 million (about Sh9.6 billion), down 39.5 per cent on the year, and underlying or operating profit fell by 12.5 per cent to 621 million (about Sh76.4 billion).

First-half sales, by contrast, grew by 6.2 per cent to 43.05 billion (about Sh5.3 trillion).

The French retail giant has two outlets in Kenya, one at The Hub Mall and the other at the Two Rivers Mall.

The country's formal retail market is dominated by Nakumatt, Tuskys, Choppies, Uchumi #ticker:UCHM and Naivas.

Key CBK Indicative Exchange Rates Used: 1 =Sh123

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