Delhaize raises prognosis for the year following strong second quarter

Delhaize raises prognosis for the year following strong second quarter

Belgian retail chain Delhaize has had a strong second quarter, and therefore raises its prognosis for the entire year. Sales of the group came to 5.3 billion euro, near what analysts had expected, but the underlying company profit of 193 million euro was clearly higher than the anticipated 180 million euro.

Belgium: market share grows

In Delhaize's home market Belgium the comparable sales growth (+0.8%) were less than half of the expected 2%. Despite this the market share of the distributor went up by 35 base points “because of our renovated stores and the expansion of our network”.

 

There is even more good news, because Delhaize succeeded in upping its company margin. It is currently 4.1% on the home market. The total company margin (3.6%) and the group profits (104 million euro) were better than expected.

 

US: pressure on prices at Hannaford

In the United States comparable sales went up by 1.1%, as was expected by analysts. For the third quarter in a row the group had a growth in volume at an underlying company margin of 3.8%.

 

There is still however some pressure, especially at the “better” chain of supermarkets Hannaford. That chain, active in the Northeast of America, had to lower prices under pressure of its competitors to keep its customers. Delhaize calls the lower prices “price investments”.

 

At Food Lion 178 more stores were repositioned, bringing the total to almost 80% of the network.

 

Southeast Europe: profitability Delta Maxi below expectations

In Southeast Europe, Delhaize is in full expansion, especially in Romania and Greece, and therefore has decided not to disclose comparable sales numbers. Globally sales increased 5.3% to 787 million and the company margin went from 3.2% to 3.4%.

 

Delhaize also continues its reorganisation in Southeast Europe: “In correlation with our agreement to focus on regions where we can generate the highest growth and return, we have made contracts for the sale of Sweetbay, Harveys and Reid’s, and for our activities in Montenegro.

 

The distribution group does admit that the profitability of Delta Maxi, the chain it bought in the Balkan in 2011, is “below expectations”.

 

Prognosis for the year goes up

Following this strong second quarter Delhaize has an organic growth of 3% for the first six months, an underlying company profits of 9.8% and an underlying company margin of 3.8%.  Based on these numbers departing CEO Pierre-Olivier Beckers announces the group will slightly up its prognosis for the entirety of 2013: Delhaize is now looking for a company profit of 780 million euro.

 

That number still includes the American chains Sweetbay, Harveys and Reid’s, which will soon be sold to Bi-Lo. Without those chains the annual company profit should come to 755 million euro.

 

Questions or comments? Please feel free to contact the editors


Arket Brussels opens: discover H&M's latest concept

14/09/2017

On Friday 15 September, H&M Group’s new store formula opens its doors on the Guldenvlieslaan in Brussels. The press got a sneak preview and discovered a surprising mixture of fashion, interior design and food. 

Nordstrom opens store without storage

13/09/2017

American fashion chain Nordstrom is to trial a new store formula in Los Angeles next month, in which customers will only be able to get advice and try out clothing. Purchases can be picked up at the store at a later date.

Primark benefits from weaker British economy

12/09/2017

Irish fashion chain Primark takes full advantage of the weak British economy, which prompted its parent company AB Foods to adjust its full-year forecast. The chain will also continue its expansion plans.

Participatiemaatschappij Vlaanderen invests in FNG

11/09/2017

Government investment fund Participatiemaatschappij Vlaanderen (PMV) will invest 15 million euro in fashion group FNG in return for 5 % of its shares. The money will go towards international expansion.

Gap Inc will focus on Old Navy and Athleta

08/09/2017

American fashion company Gap will alter its internal strategy and turn its attention to Old Navy and Athleta. Gap and Banana Republic, which both received the most attention up until now, will have to step aside.

Global Fashion Group cuts losses

08/09/2017

Global Fashion Group, the fashion group founded by investment group Kinnevik and Rocket Internet, managed to lower its losses even more in the second quarter. On top of that, turnover grew more than 25 %.

Back to top