Ahold Delhaize highlighted the performance of its U.S. banners in reporting its Q1 results
Ahold Delhaize has posted what it calls “another strong quarter with solid sales growth and higher margins, resulting in marked growth of operating income and strong growth of net income at constant exchange rates.” That includes its American business, which experienced higher comparable-store sales despite intensifying competitive pressures.
"We are pleased with our performance during the first quarter, proving that the execution of our Better Together strategy continues to bear fruit, delivering sales growth and synergies throughout the business,” said Ahold Delhaize CEO Dick Boer, who will be succeeded in the role by Frans Muller on July 1. “Benefiting from our scale and building on our leading positions on the U.S. East Coast and in Europe, our great local brands demonstrated their capabilities and agility to meet rapidly changing consumer needs and preferences.”
According to Boer, the Zaandam, Netherlands-based retail conglomerate’s first-quarter sales grew 2.5 percent at constant exchange rates to €14.9 billion (US $17.7 billion), bolstered by strong performance in physical stores and the continuing rise in online businesses. The company’s underlying operating margin grew to 4.0 percent from 3.8 percent in the year-ago period, mainly driven by synergies, while net consumer online sales increased 23 percent across the group, keeping it on track to reach almost €5 billion (US $5.9 billion) in online consumer sales by 2020.
Ahold Delhaize’s U.S. banners, which are reported as one segment as of Jan. 1, logged improved comps growth, excluding gasoline, of 2.8 percent, backed by the favorable effect of holidays and some weather impact. The underlying operating margin shot up 30 basis points to 4.3 percent, aided by synergies and with the Save for Our Customers program offsetting cost inflation. In a competitive market with new entrants, Food Lion saw its 23rd straight quarter comparable-volume growth as its Easy, Fresh and Affordable store remodel program has now rolled out to more than 500 of the chain’s stores. Additionally, online sales rose 9 percent across all of the company’s U.S. banners.