Shares in French supermarket retailer Casino slipped back on Monday after the company cut the 2021 profit outlook for its French retail operations, blaming a higher-than-expected decline in the country's food market in the fourth quarter.
Casino's shares were down 7.2% in early session trading, and Casino's woes weighed on its larger domestic rival Carrefour, whose shares also fell 3.2%.
'In Q4 2021, the French food retail market conjuncturally declined at a higher rate than expected, by -3.7% at country level, and -5.6% in Ile de France,' the company said in a statement.
Profit Pressure Has An Effect
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 next month.
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.
Jefferies analysts highlighted Casino's strong exposure to convenience stores in city centres 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.
Casino Group, which recently announced a successful debt refinancing, will disclose its fourth-quarter trading and 2021 annual results on 25 February 2022, the company said.