Ahold Delhaize Gets 34% Coronavirus Bump
Ahold Delhaize says its same-store sales jumped an astonishing 34% in March thanks to consumers stockpiling groceries during the coronavirus outbreak.
In a business update Tuesday, the company said it expects group net sales growth of approximately 15% when it reports first quarter earnings on May 7. Same-store sales growth excluding gasoline is expected to be approximately 14% in the U.S., and 10% in Europe.
“We expect underlying operating margin in Q1 to be above the prior year," said Frans Muller, chief executive of the Dutch company that operates Stop & Shop and other grocery banners in the United States. "The Q1 margin has benefited from the higher sales trends experienced at an earlier stage compared to the timing of the significant investments made enhancing associate pay and benefits and implementing additional safety and protective measures, which have become material towards the end of Q1.”
Despite the sales boost, the company said the pandemic had also created uncertainty so it was sticking with its full-year outlook.
“Although we continued to experience higher than normal sales growth through the end of March, there is increased uncertainty in sales over the course of the year, especially as it applies to changes in consumer shopping patterns and behavior,” Muller said. “The timing of investments in associate and customer safety and protection have become material towards the end of Q1. This means we are not likely to sustain the underlying operating margin level experienced in Q1. Nevertheless, we continue to expect underlying earnings per share growth in the mid-single-digit range for the year."
The company did say its free cash flow would probably exceed its previous guidance of 1.5 billion euros ($1.63 billion).
"We are extremely proud of the talented and hardworking associates across our brands around the globe, who have worked tirelessly to serve their local communities in this time of need during the COVID-19 crisis. Every one of our local brands remains committed to protecting the health and safety of associates and customers," Muller said.
On April 1, Kroger reported that the COVID-19 pandemic triggered large sales increases across both physical stores and digital channels in March, with same-store sales without fuel accelerating by approximately 30%.
On April 3, the Wall Street Journal reported that Walmart sales from its over 4,700 U.S. stores increased nearly 20% over the past four weeks compared with the same period last year.
Ahold Delhaize USA is No. 4 on Progressive Grocer’s 2019 Super 50 list of the top grocers in the United States.
