Ahold Delhaize says its first quarter was not hit by the current uncertain economic conditions: its US profit margin fell only slightly and CEO Frans Muller speaks of strong performance in the Benelux, despite the impact of the tobacco ban.
Reassuring
The retailer’s quarterly sales grew 5 % to 23.3 billion euros, helped by the integration of Romanian Profi. On a like-for-like basis, growth was 3.3 %, slightly higher than analysts’ expectations. In Europe, comparable growth was 3.7 %, despite the cessation of tobacco sales in the Benelux. Online sales grew 13.7 % thanks to growing food sales on both sides of the ocean, and to a good performance by Dutch non-food webshop bol.
The operating profit margin went down 0.2 percentage points to 3.8 %, as the retailer is investing in price cuts in the United States to boost market share, leading to a 0.3 percentage point decrease in margin. In Europe, the profit margin rose 0.3 percentage points. CEO Muller points to strong performance in the Benelux, while there is slight pressure on margins in Central and Eastern Europe, partly due to the integration of Profi.
Despite the volatile economic environment, Ahold Delhaize is sticking to its previous forecasts, with margins of about 4 % this full year.
