Ahold Posts 'Solid' Q3

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Ahold Posts 'Solid' Q3


In discussing Ahold’s interim report for the third quarter of 2010. The Amsterdam-based retail conglomerate’s CEO, John Rishton, had reason to be optimistic. “In an environment that remains challenging, we delivered another quarter of solid results,” noted Rishton. “Sales were up 10.8 percent, we delivered positive identical-sales growth in the United States and in Europe, operating income increased by 7.5 percent, and we grew volumes and market share in the United States and the Netherlands. We will continue to invest to deliver value to our customers while balancing sales and margins.”

Net sales for the quarter were 6.7 billion euros, while operating income was 285 million euros. Net income of 223 million euros, including 16 million euros of charges related to past divestments, was down 21 million euros vs. last year, however.

For the first three quarters of 2010, net sales were 22.6 billion euros, an increase of 6.8 percent from the year-ago period. Operating income was 1.0 billion euros, a rise of 8.9 percent over last year, and retail operating income grew 103 million euros – a 10.2 percent increase -- to 1.1 billion euros. Net income during this period was 699 million euros, up 71 million euros. Ahold attributed this rise mainly to year-over-year changes in the company’s net provision for losses under lease guarantees related to former subsidiaries Bi-Lo and Bruno’s.

Over at Ahold USA, third-quarter net sales were $5.3 billion, up 4.8 percent, partly because of business acquisitions such as Ukrop’s stores, which brought in $114 million in sales. Identical sales grew 1.0 percent (a 0.6 percent increase excluding gasoline). Operating income was $196 million, or 3.7 percent of net sales, a decline of $38 million, as a result of $10 million in restructuring and related charges, losses of $11 million relating to the newly acquired Ukrop’s stores, and $9 million of reorganization and IT integration costs. Operating income last year included real estate impairments of $10 million, a $32 million release of insurance provisions and a multiemployer pension plan withdrawal charge of $9 million.

Year-to-date, net sales at Ahold USA were $17.9 billion, up 4.8 percent, partly as a result of the Ukrop’s acquisition, which contributed $333 million of that amount. Identical sales rose 1.4 percent (a 0.3 increase excluding gasoline). Operating income was $761 million, or 4.2 percent of net sales, a $34 million decrease. Major items affecting operating income came to a net charge of $60 million, vs. a net charge of $6 million last year.