WRAPUP 1-Ahold, Casino shares fall on earnings miss

(Adds analysts, share prices)

* Ahold Q2 operating profit down 14.2 percent

* Casino confirms 2008 targets

* Ahold shares down 4.2 percent, shares down 0.25 percent

By Foo Yun Chee and Jessica Mead

AMSTERDAM/PARIS, Aug 28 (Reuters) - Shares in European supermarket groups fell sharply on Thursday as results from Ahold (AHLN.AS) of the Netherlands and France's Casino (CASP.PA) missed forecasts, deepening investor concerns about weakening markets.

Ahold, which owns the Netherlands' biggest chain Albert Heijn but makes just over half of its sales in the United States, said second quarter operating profit fell 14.2 percent after price cuts and promotions to attract cash-strapped shoppers hurt margins.

The supermarket group, the seventh biggest in the world by sales, earned 235 million euros ($345.6 million) in operating income, below an average forecast of 247 million euros in a Reuters poll of 15 analysts.

Ahold shares were down 3.9 percent at 8.35 euros versus a 1.5 percent lower DJ Stoxx retail index .SXRP. Casino was 1.4 percent lower at 63.39 euros.

Shares in France's Carrefour (CARR.PA) also dipped 3 percent to 33.42 euros ahead of results on Friday and were the biggest faller among French blue chip stocks

"Ahold's figures are good in this climate but there is margin pressure and the question whether Albert Heijn can sustain its success," said asset manager Rob Koenders at Harmony Vermogensbeheer, which holds Ahold shares.

Rabo Securities said the margin decline at Ahold's Albert Heijn was a one-off and also pointed to the smaller than expected margin decline at U.S. chain Stop&/Shop.

"Although we expect a negative reaction of (Ahold's) share price, we do not regard the second quarter as a major disappointment," said analyst Patrick Roquas.

Ahold stuck to its full-year target, saying a revamp of its U.S. stores launched in 2006 and due to end this year, will boost margins later this year and as it cut costs.

"We are confident we will manage the balance between sales growth and margin and deliver our underlying retail operating margin guidance for 2008 of 4.8 to 5.3 percent," Chief Executive John Rishton said in a statement.

U.S. grocers such as Wal-Mart (WMT.N), Safeway (SWY.N) and Kroger (KR.N) have said consumers were trading down amid a weak economy, a soft housing market and inflationary pressures.

Wal-Mart, which is aggressively wooing customers with low-priced groceries and prescription drugs, raised its full-year forecasts earlier month while Kroger lifted its full-year sales target.

But rivals such as Supervalu (SVU.N) and Safeway have cut their outlooks.

Ahold said its operating margin fell to 4.3 percent from 5.1 percent a year ago and compared with 4.9 percent in the first quarter. Net profit from continuing operations rose 4.1 percent to 177 million euros from 170 million a year ago.

Operating income at Dutch unit Albert Heijn was up 6.2 percent at 138 million euros but below the consensus of market forecasts.

Casino, which operates nearly 10,000 stores in 11 countries, reiterated its 2008 targets for faster organic growth in sales and said its current operating result would rise further.

First-half trading profit was up 9.8 percent to 540 million euros, driven by strong growth in its international operations, but it was slightly an average analyst forecast of 543.9 million euros in a Reuters poll.

"The operating result is in line with expectations and the net profit is better than expected despite a rise in financing costs,' said analyst Nicolas Champ at Oddo Securities.

Net profit from continuing operations rose 10.7 percent to 230 million euros. (Additional reporting by Noelle Mennella; Editing by Greg Mahlich/Andrew Callus)