Guidance cut despite a stronger quarter

Carrefour published its third-quarter results on Tuesday evening, 20 October, reporting revenue of nearly 22.7 billion euros, up 3.9% year on year with fuel included. The French grocer still lowered its financial targets for 2026, citing a deterioration in the social and security situation in France, its main market. Adjusted earnings per share are now expected to be stable or grow slightly, down from an earlier forecast of high single-digit growth. The recurring operating margin outlook was trimmed to an improvement of zero to 15 basis points from 25, and free cash flow, previously expected to grow, is now seen declining. Explaining the shift on the press call, finance director Matthieu Malige said:

“This good third quarter is now followed by the deterioration of the social and security situation in France, which is pushing us into a new period.”

How the unrest hit the stores

The unrest began with student protests over conditions in schools and widened into anger over rising living costs and weaker public services. The largest demonstrations came on Saturday, 17 October, when the French interior ministry counted about 550,000 people on the streets across the country, and riots and looting followed in several cities. About 1,800 people were detained across France after the events of 17 October, according to one report, while another puts the figure at about 2,400 detained in the disturbances of the past weekend and after. Authorities imposed partial curfews in parts of Paris and other cities, including Lille, Nice and Lyon, to stop the rioting and the looting of shops. Bompard told analysts on a conference call that about 50 Carrefour stores were hit on the first day of unrest, many of them looted and seriously damaged. According to Bloomberg, Carrefour is the first retailer to put a figure on the financial effects of the riots, and the group is probably hard hit because many of its outlets sit in central Paris and other cities.

Consumer spending and the year-end season

Bompard said the group faces a high level of uncertainty about spending trends and the conditions under which its stores can keep trading. Carrefour expects lower footfall in urban stores, shorter opening hours linked to the curfews, and higher security and logistics costs. These effects arrive just before the Black Friday and Christmas trading period, at a time when energy costs were already squeezing household budgets. Bompard added that the medium-term strategic plan remains unchanged. In a written statement, he described the situation this way:

“Our group is facing an unprecedented situation in France.”

Markets and the debt question

Carrefour shares fell sharply after the announcement, and its American depositary receipts dropped more than 8% in US trading. The unrest has also weighed on French government debt, where investors have been dumping bonds and rising yields have widened the spread over other sovereign paper. The New York Times reports that investors are unsure whether the government can manage its budget with high interest rates and political uncertainty. Macron, nearing the end of his time in office and leading a centrist government without a governing majority, faces a bind: a payout like the roughly $11 billion in tax cuts and wage increases he offered after the 2018 gas-price protests could rattle bond investors further, while doing nothing may deepen the unrest. Researchers Michal Brzozowski and Joanna Siwinska-Gorzelak of the University of Warsaw describe a so-called doom loop in which market turmoil and political tumult feed each other.