Delhaize Group Posts Improved Q1
Delhaize Group has reported revenues for its first quarter of 2013 of €5.5 billion (US $7.2 billion), an increase of 2.1 percent and 1.5 percent at identical and actual exchange rates, respectively. Organic revenue growth, excluding revenues from the 126 U.S. stores closed in the first quarter of 2012 and the 45 shuttered in the first quarter of 2013, was 3.8 percent.
The Brussels-based retail conglomerate’s U.S. comparable-store sales growth was 1.9 percent (3 percent including a 1.1 percent positive calendar impact), which Delhaize attributed to favorable weather conditions and continued good volume trends in Food Lion’s repositioned stores and at Hannaford. Although these gains were partly offset by deflation, it was at a lower level than the previous quarter, the company noted.
Belgian comps grew 2.4 percent (0.6 percent including a 1.8 percent negative calendar impact), due to inflation and improved volume trends. In southeastern Europe, revenues rose 6.8 percent at identical exchange rates because of store openings, while consumer spending is under pressure in the region.
Underlying operating profit was €214 million (US $279 million), a 13.7 percent increase versus the first quarter of 2012 at identical exchange rates (13 percent at actual exchange rates), leading to an underlying operating margin of 3.9 percent (3.5 percent in the year-ago period). In the U.S., underlying operating margin was 4.2 percent (3.7 percent last year) as a result of positive sales leverage backed by the favorable calendar impact, nonperforming store closures, cost reductions and Bottom Dollar Food’s considerably improved results, partly offset by continued price investments.
In Belgium, underlying operating margin was 5.1 percent, compared with 4.6 percent in the year-ago period, mainly driven by cost control and positive sales leverage. In southeastern Europe, underlying operating margin fell to 1.4 percent, from 2 percent last year, primarily because of price investments.
As a result of continued focus on its strategic priorities, Delhaize said it expected underlying operating profit of about €775 million (US $1 billion) for the full year 2013 at identical exchange rates.
The company added it had decided to postpone its Capital Markets Day, previously slated for May 8, until later in the year, to allow for a more comprehensive update on its business and long-term strategy.