France's second-largest supermarket operator Casino (CGUSY) traded lower Tuesday after sales growth slowed in the first quarter, anchored by disappointing figures in its two key markets of France and Brazil.

Casino stock fell 1.88% to €51.02 by 10:45 CET in Paris, wiping out all of the gains recorded over the past three months.

Casino said that first quarter revenues were up 3.1% to €9.3 billion, lagging the 5.1% increase in revenues that the company posted in the final quarter of last year. Same store sales in France rose a slim 0.2% over the quarter, dragged down by falling sales at hyper-markets division Geant, where revenues fell 1.9% in the first quarter, compared to a 0.6% gain in the fourth quarter.

Supermarket operators in France have struggled to grow sales due to a moribund economy and have also struggled to maintain margins amid fierce competition. Casino's major rival Carrefour (CRRFY) , last week, posted a better than expected 6.2% increase in sales over the first quarter, despite sales in France coming in at a slim 0.8% increase. Sales at Carrefour's hypermarkets fell 1.6% over the quarter.

Carrefour shares fell more sharply, trading 2.88% lower at €20.58 leaving the stock down just over 10% since the start of the year. Casino shares have gained 12% over the same period.

UBS earlier this month cut Carrefour to "neutral" from "buy" on concerns about the group's margins in its home market of France, where it saw signs of renewed erosion due to price wars with Casino and co-operative E.Leclerc.

Casino's Brazilian supermarket operator Grupo Pao de Acucar, has also struggled to increase volumes amid a long-term economic slump in the country. Sales in Brazil rose 5.8% on a like-for-like basis over the first quarter, down from 7.9% in the fourth quarter.

Casino's sales in France and Brazil have grown in importance after the supermarket operator sold operations in Asia to reduce debt after its credit rating was cut to junk by Standard & Poor's in March last year.

Muddy Waters, a hedge fund led by Carson Block, has shorted Casino stock since at least Dec. 2015, when it accused the retailer of using earnings from property sales to inflate profit and warned that the company is being run to fund the debts of its holding entities. Casino refutes the claims.