Carrefour cuts operating margin improvement target to 0–15 basis points amid unrest in France
Key Facts
Carrefour cut its operating margin improvement target for 2026 to 0–15 basis points from 25 basis points previously, citing deteriorating operating conditions linked to unrest in France. In its sales release accompanying management estimates on October 20, the group maintained its forecast for recurring operating profit growth for the year. The guidance revision also extended to adjusted earnings per share, which the company now expects to be flat or rise slightly, rather than grow by a high single-digit percentage. Carrefour described its new earnings per share guidance in its statement as "flat to slight growth." It also revised its net free cash flow forecast to a slight decline from a previous target of slight growth, extending the revision to profitability and cash generated by the business.
Chief Financial Officer Matthieu Malige estimated the impact of the unrest on operating profit at between 80 million euros and 200 million euros, according to management remarks reported by Reuters. The company linked the deterioration in operating conditions to higher security and logistics costs, expenses associated with keeping stores open during the unrest. It added that footfall had declined, while curfews had shortened opening hours, weighing on store activity alongside rising costs. Chief Executive Alexandre Bompard said, according to Reuters, that "around 50 of our stores were damaged on the first day." He said many of those stores had been looted, as French operations faced store damage and restrictions on customer opening hours.
The cut to annual guidance came despite group like-for-like sales growth accelerating to 2.3% in the third quarter of 2026, according to Carrefour's results presentation. Like-for-like sales had grown by 2.1% in the first half of the year, with the group continuing to record growth as it moved into the third quarter. Total sales for the period reached 22,694 million euros, including value-added tax and before the application of hyperinflation accounting, according to figures in the presentation. That compares with total sales of 21,840 million euros in the third quarter of 2025, the corresponding period cited by the group in its results. In e-commerce, Carrefour recorded group-wide growth of 18% in the third quarter, alongside the increase in like-for-like sales.
By market, like-for-like sales in France grew by 1.2% in the third quarter, according to the results presentation, despite the operating pressures management described in the French market. Carrefour said all store formats in France delivered a positive performance during the period, alongside like-for-like sales growth across the market as a whole. In Spain, like-for-like sales growth reached 2.1% in the same quarter, a performance the group attributed to higher volumes sold in its stores. Brazil recorded like-for-like sales growth of 1.4%, according to the geographical breakdown Carrefour included in its third-quarter sales presentation. The company linked the Brazilian performance to improving commercial momentum at Atacadao, while Spanish growth was driven by volumes, with contributions from the markets accompanying continued growth across the group.
On investment, Carrefour lowered its annual capital expenditure target to 1.6 billion euros from a previous target of 1.7 billion euros for 2026. The group said in its results presentation that the capital expenditure revision includes reduced investment in France, where its operations face higher security and logistics costs. The investment budget adjustment formed part of the annual financial revision, which also included a forecast for net free cash flow to decline rather than grow. Carrefour, meanwhile, confirmed that implementation of its cost-cutting plan remained on track to meet its target of 1 billion euros in savings during the year. The group thus retained its cost savings target while reducing its annual investment allocation and lowering its targeted improvement in operating margin.
Looking ahead, Bompard pointed to protests scheduled in France on October 24, according to remarks reported by Reuters following the presentation of the group's performance. The chief executive expected those protests to affect business, even with improved security measures, as the operating risks discussed by management persisted. This follows the damage and looting Bompard described, along with the constraints on footfall and opening hours the company cited among the reasons for deteriorating operating conditions. After that date, Carrefour plans to present its strategy for hypermarkets in France on November 17, 2026, according to the date announced in its statement. The French strategy presentation follows reduced investment in its domestic market and revised annual guidance, while its target for recurring operating profit growth remains in place.