Ahold Delhaize Logs ‘Stable’ Q1
For its first-quarter 2024 results, Ahold Delhaize, one of the world’s largest food retail groups, reported group net sales of €21.7 billion, up 1.3% at constant exchange rates and up 0.4% at actual exchange rates. Q1 comparable-store sales excluding gas increased by 1.6% for the group, with an increase of 0.8% in the United States and an increase of 2.8% in Europe. Net consumer online sales dipped by 1.0% in Q1 at constant exchange rates, negatively affected by 5.7 percentage points because of the divestment of FreshDirect. This was partly offset by double-digit growth at U.S. brands Food Lion and Hannaford and accelerating growth at Dutch supermarket chain Albert Heijn.
“I am pleased to report a stable first quarter, placing us well on track to reach our goals and aspirations for the year,” noted Ahold Delhaize President and CEO Frans Muller. “The external environment remained challenging, similar to the second half of 2023. Our brands have been very active during the quarter in delivering great value, quality and savings to customers, creatively using the full spectrum of their own-brand assortments and omnichannel toolkits.”
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In the United States, Q1 net sales were €13.3 billion, a decline of 0.6% at constant exchange rates and down 1.8% at actual exchange rates. U.S. comps excluding gasoline grew by 0.8%, and saw a net positive impact of about 1.3 percentage points from weather and calendar shifts, mainly in relation to the timing of New Year’s Eve and Easter. Robust growth in pharmacy was offset by the non-recurrence of emergency SNAP benefits, the moderation of inflation rates, the divestment of FreshDirect and lower gasoline sales. As noted above, Food Lion and Hannaford continued as Ahold Delhaize’s top U.S. brands, delivering 46 and 11 straight quarters of positive sales growth, respectively.
“In the U.S., our decision to orient our online fulfillment capabilities towards more efficient, less asset-intense same-day delivery models, such as click and collect, is … paying off,” observed Muller. “Our online sales in the U.S. grew 4.7% in the first quarter on a like-for-like basis, fueled by new customer growth, as well as strong retention of existing e-commerce customers.”
He also mentioned the retail conglomerate’s health and sustainability efforts across its divisions, adding: “To support the further reduction of our scope 3 carbon emissions, all our brands in Europe have now launched climate hubs to help suppliers set their own reduction targets. Ahold Delhaize USA launched a first supplier collaboration focusing on reducing carbon emissions, with several more to follow this year.”
The company went on to reconfirm its 2024 guidance. Underlying operating margin is expected to be 4.0% or higher, in accordance with Ahold Delhaize’s historical profile. Underlying EPS is anticipated to be at around 2023 levels at current exchange rates. Free cash flow is expected to be around €2.3 billion. Net capital expenditures are expected to total about €2.2 billion, lower than the previous year, mainly because of divestments of U.S. facilities. Overall, the company anticipates that it will continue its major investments in its brands' store networks and the rollout of omnichannel capabilities, as well as advancing its health and sustainable initiatives.
Of 2024, Muller said: “It is an important year for our company, as we pivot to our refreshed strategy, which we are very much looking forward to unveiling on May 23. With our strong market positions, our financial strength and the great foundational work we have carried out over the last few years, I am confident we have a great starting point and strong plans for our next phase of growth.”
Ahold Delhaize USA, a division of Zaandam, Netherlands-based Ahold Delhaize, operates more than 2,000 stores and 20 distribution centers across 20-plus states. It is No. 10 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Ahold Delhaize’s U.S. companies include its local brands Food Lion, Giant Food, The Giant Co., Hannaford, and Stop & Shop. PG also named Ahold Delhaize USA one of its Retailers of the Century and one of the 10 most sustainable grocers in 2024.
