CARREFOUR warned on profits for the fourth time in a year after a plan to raise prices backfired, and said a potentially lucrative merger in Brazil was off – at least for now.
Shares in the French retail giant dropped to a two-year low after it said in a second-quarter sales update that it expected operating profit in the first six months to fall 23 per cent and acknowledged it made a mistake in raising prices earlier this year, ahead of some rivals. Carrefour shares have taken a pummeling after tycoon Abilio Diniz abandoned a plan to merge Brazilian retailer Grupo Pao de Acucar (GPA) with Carrefour’s local assets, following opposition from the government and his partner in GPA, French retailer Casino.
“This is clearly another profit warning, the second in one month. Stay away from the stock,” a Paris-based trader said.
The shares have fallen 44 per cent since September last year.