Shares in Carrefour fell after the French retail giant said second-quarter comparative sales growth slowed on quarter as costs rose due to the Middle East conflict.
Shares in early European trade were down 5.4% at 15.62 euros, but are up 9.7% in the year to date.
The French grocer said late Thursday that tensions in the Gulf region led to increased transport, energy and fuel costs in the period.
Carrefour said like-for-like sales growth slowed to 1.9% from 2.2% in the first quarter. In France, second-quarter like-for-like sales grew by only 1%, compared with growth of 1.4% in the prior quarter.
Moreover, first-half gross margins as a percentage of net sales dropped 28 basis points to 19.1% from 19.3% in the first half of 2025. This was driven by heavy price cuts and promotional investments in the period, it said.
The company said that sales for the first half rose to 43.79 billion euros ($49.82 billion) from 43.06 billion euros in the year prior period. Visible Alpha consensus for the metric was 44.07 billion euros.
Carrefour reported a swing to a first-half net profit of 30 million euros from a net loss of 401 million euros.
The board reiterated guidance for the year of higher recurring operating profit, growth of more than a quarter percentage point in its operating margin, increased net free cash flow and high single-digit growth in adjusted earnings per share.
Analysts at J.P. Morgan said reaching those targets will require a massive turnaround in the second half of the year. According to the analysts, for the company to achieve those numbers, operating profit will need to grow by 12% compared with last year--a steep jump after growing just 4% in the first half. Furthermore, after spending more money than they took in during the first half it will need to generate over 3.5 billion euros in actual cash during the second half of the year.
"Whilst we acknowledge some positives... we continue to be concerned about the market's very high expectations, the overall quality of earnings and the lack of cash flow generation," J.P. Morgan said.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com
(END) Dow Jones Newswires
July 24, 2026 04:11 ET (08:11 GMT)
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