ZAANDAM, THE NETHERLANDS - Ahold Delhaize, an international food retail group and a leader in both supermarkets and e-commerce, reports third quarter results.
Q3 Financial highlights
Ahold Delhaize net sales were €22.5 billion, an increase of 6.1% at constant exchange rates and up 2.2% at actual exchange rates. Our net sales growth was driven by the Profi acquisition, comparable sales growth excluding gasoline of 2.9% and store openings, partially offset by the closure of Stop & Shop stores and lower gasoline sales. The Company's Q3 comparable sales excluding gasoline were negatively impacted by 0.1 percentage points due to weather, and by 0.3 percentage points from the cessation of tobacco sales at supermarkets in Belgium.
In Q3, Ahold Delhaize's online sales increased 12.2% at constant exchange rates. This was driven by double-digit growth in online grocery in both regions and a strong performance at bol.
Ahold Delhaize underlying operating margin was 4.1%, an increase of 0.3 percentage points at constant rates. Strong performance in the U.S., supported by non-recurring items that added 0.2 percentage points to its margin, more than offset the impact of the first-time consolidation of Profi and price investments in the U.S.
In Q3, Ahold Delhaize IFRS operating income was €902 million, representing an IFRS operating margin of 4.0%.
Diluted EPS was €0.65 and diluted underlying EPS was €0.67, up 8.7% at actual exchange rates compared to last year's results.
In the quarter, Ahold Delhaize purchased 10.5 million of its own shares for €371 million, bringing the total amount to €813 million in the first three quarters of the year, according to the recent release.
Comments from Frans Muller, President and CEO of Ahold Delhaize
“The capabilities we have cultivated within our organization provide us with the expertise and resilience to succeed in complex and dynamic environments. They enable us to scale successful solutions across our brands to unlock additional operational efficiencies. Thanks to the dedication and focus of our teams, we are making meaningful strides in advancing our Growing Together strategy. Our brands are creating value every day for customers by lowering prices, elevating our own-brand assortments, and collaborating with vendors to deliver impactful promotions. We are also sharpening our portfolio through remodels and enriching our omnichannel experiences to drive convenience and reach. This is all underpinned by the diligent execution of our Save for Our Customers program, which creates the fuel to maintain a steady pace of investment.
“Our third quarter results reflect the strong foundation and flexibility of our operating model. Net sales increased 6.1% at constant exchange rates (2.2% at actual exchange rates) and comparable sales growth excluding gasoline was 2.9%. Net sales were positively impacted by 3.6 percentage points from the Profi acquisition and negatively impacted by 0.7 percentage points from the closure of Stop & Shop stores and the cessation of tobacco sales in Belgium. We delivered a healthy and slightly higher-than-planned underlying operating margin of 4.1% despite dynamic conditions in several markets. As a result, diluted underlying EPS was up 8.7% at actual exchange rates.
“In the U.S., net sales increased 1.9% at constant exchange rates (decreased 4.3% at actual exchange rates), while comparable sales growth excluding gasoline increased 2.9%. The latter was negatively impacted by 0.2 percentage points from cycling the impact of hurricanes in the prior year. Two notable accomplishments were Food Lion's impressive 52nd consecutive quarter of comparable store sales growth and the completion of the roll-out of PRISM at Food Lion and Hannaford. With that, all the U.S. brands are now on the proprietary platform, which will allow us to increase the speed and impact of innovation in omnichannel convenience for customers moving forward. The Stop & Shop team has been laser focused over the past year on executing their pricing strategy, extending key elements and refinements to an additional 88 stores in Massachusetts during the quarter. At the same time, our associates are improving the quality of service and in-store execution, optimizing promotional effectiveness, and tightening day-today operations. While there is plenty of hard work ahead, I am encouraged by the positive response from customers.
“In Europe, net sales increased 12.4% at constant exchange rates (12.5% at actual exchange rates), including the impact of Profi. Comparable sales excluding gasoline increased 2.8%, negatively impacted by 0.6 percentage points from the cessation of tobacco sales. With rising inflation, stagnating economic growth and governmental policy moves, the business and customer climate is pressured. For example, in Serbia, the industry is facing severe headwinds to the operating model resulting from a government decree on the limitation of prices, while, in Romania, higher VAT rates and changes to the phasing of governmental food stamps to low-income consumers is negatively impacting customer spending power. Nevertheless, our brands continue to push the boundaries to navigate these dynamics and are working hard to sustain and grow their competitive positions. In particular, for customers, we are maintaining the high focus on value, leaning into strengthening affordable healthy and convenient assortments. All our European brands now have a minimum of 900 Price Favorite products across their assortments and continue to update and expand their fresh produce sections, focusing on the increased demand for convenience, healthy and ready-made meals.
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