Higher turnover, lower operational profit for Ahold

Higher turnover, lower operational profit for Ahold

Thanks to increased turnover in the Netherlands (its home territory), Belgium and the United States, Dutch supermarket group Ahold has had a good third quarter.

"Strong turnover growth" in Belgium

Ahold's June-September period saw a 1.9 % turnover increase to 7.47 billion euro (1.5 % excluding exchange rates changes). The total of Dutch and Belgian activities represented a share of 2.6 billion euro and went up 1.4 %. Stores which have been around for more than a year saw turnover drop 1.1 %, but Ahold still says Belgium had "strong turnover growth".

 

20 "Albert Heijn to go" convenience stores have also been remodeled and have grown sales 10 %, while its online activities "have once again realized double-digit turnover growth".

 

Ahold's American activities also performed well: turnover grew 1.6 % to 4.5 billion euro, thanks to a "better customer proposition" in more than half of its American stores. "Ahold USA's market share was higher than last year, driven by the New England division, while our market share at Giant Landover remained under pressure." A strike at its competitor Market Basket helped the Dutch concern as well.

 

Bigger investments, more expensive resources

In the third quarter, underlying company profit reached 285 million euro, which is 5 % lower than the previous year, but still better than analyst expectations at 280 million euro. Net profit did grow 7.9 % to 178 million euro.

 

The underlying operational margin reached 4.9 % for its Belgian-Dutch activities, down from 5.3 % the previous quarter. Ahold attributes the drop to bigger investments in its internet shop, Bol.com. American margins remained level at 3.8 %, even though bigger store investments and more expensive meat resources impacted its yearly margin.

 

"This quarter we reported improved sales trends in the United States and the Netherlands while our margin was stable versus the prior quarter, excluding the impact of the SPAR acquisition", a satisfied CEO Dick Boer said.

 

"In the Czech Republic (with a 367 million euro net turnover), we are well underway with the integration of the SPAR business. We are pleased with the performance of the stores that have been converted to the Albert brand and expect to have all stores rebranded by the end of the first quarter next year", the company said.

 

"Signs of improvement in 2015"

Ahold expects the current price pressure in the Belgian and Dutch markets to persist for a while. "There is barely inflation or economic growth", Boer said, but he is optimistic nonetheless. "People see light at the end of the tunnel, but emotions are quite important in how the consumer perceives the economy."

 

Dick Boer feels the fourth quarter will be very much like the third quarter. "We expect that ongoing investments in our customer proposition and further development of our formats and assortment will continue to result in improving sales trends."

Questions or comments? Please feel free to contact the editors


Hunkemöller wants to conquer Switzerland

17/08/2017

Dutch lingerie chain Hunkemöller aims to open a chain of physical stores in Switzerland, after having already opened a Swiss web shop in September 2016. The first physical store will open its doors in October.

Shoe brand Bally put up for sale

16/08/2017

Austrian investment firm JAB Holding wants to sell Swiss shoe brand Bally, hoping to get at least 600 million euro. The same company sold shoe brand Jimmy Choo not too long ago, as it wants to focus on its food brands henceforth.

Crocs loses patent battle

14/08/2017

Shoe manufacturer Crocs has lost a patent court case revolving around the shoe’s design. According to the American Patent & Trademark Office (USPTO), another company has had a similar design for much longer.

Coolcat's losses compound

14/08/2017

Dutch fashion chain Coolcat, part of entrepreneur Roland Kahn’s group, has not managed to lower its losses in 2016. On the contrary: its losses grew more than 50 % compared to the year before.

Zalando's growth once again surpasses 20 %

10/08/2017

German Zalando has achieved its 20 % growth target for the second quarter, but just barely. It still forecasts a 20 to 25 % growth for its full fiscal year.

Gucci files lawsuit against Forever 21

09/08/2017

Fashion label Gucci has decided to file a lawsuit against fashion chain Forever 21 in the United States. The case revolves around several pieces of clothing, all with a blue-red-blue or green-red-green ribbon. 

Back to top