Big C Supercenter Pcl, the Thai unit of Casino Guichard-Perrachon SA, slumped the most in one year in Bangkok after reporting an unexpected drop in profit.
Big C, the country’s second-biggest operator of hypermarkets by number of stores, slid 8.2 percent to close at 225 baht, its steepest decline since May 14, 2012. The stock was the biggest loser in the SET100 Index.
First-quarter net income fell 21 percent from a year ago to 1.4 billion baht ($47 million) as higher wages, utility bills and insurance premiums increased expenses. That trailed the average estimate of 1.84 billion baht profit in a Bloomberg survey of eight analysts.
“Cost pressures from minimum wage and utilities seem more prominent than expected,” Kae Pornpunnarath and Ebru Sener Kurumlu, analysts at JPMorgan Chase & Co., said in a note to clients today. Narrowing of the gross profit margin “reflects strong competition in the hypermarket segment and initial cost of penetrating into a new store format,” they said.
JPMorgan downgraded Big C to neutral, the equivalent of hold, from overweight, citing “disappointing” earnings. CIMB Securities (Thailand) Co. Ltd. cut the stock to underperform, the equivalent of sell, from neutral.
Big C has implemented cost-control measures to mitigate the increase in operating expenses in 2013, the company said in a statement to the exchange. The company’s shares have gained 9 percent this year, trailing a 17 percent gain in the benchmark SET Index.