Ahold Delhaize reports ‘strong financial performance’
Zaandam, The Netherlands-based Ahold Delhaize reported its third-quarter earnings today, noting increasing sales growth and improved margins, according to CEO Dick Boer.
Ahold Delhaize’s net sales increased by 7.4 percent to $17.5 billion (up 10.9 percent at constant exchange rates), while net income rose 54 percent to $419.9 million (up 59.5 percent at constant exchange rates).
Pro forma underlying operating margin increased to 3.9 percent, up 40 basis points compared to Q3 2016, the company stated.
“We reported a strong financial performance again this quarter as margins increased significantly, driven by synergies while savings from our ‘save for our customers’ programs are continuously being reinvested in the business,” Boer said. “We continue to successfully implement our Better Together strategy.”
Ahold Delhaize expects cumulative net synergies for the full year of 2017 to increase from $255.2 million to $290 million.
“In the United States, inflation returned at low levels, and sales performance further improved,” Boer continued. “We gained market share across our brands in a competitive landscape with new entrants. Food Lion continued to report strong volume growth, supported by the rollout of its ‘Easy, Fresh & Affordable’ strategy, whereas Stop & Shop New England benefited from a strong summer holiday season.”
In Europe, the company’s Dutch business “continued to show good momentum with comparable sales growth and strong margins,” he said.
Both in the United States and in Europe, Ahold Delhaize in investing more in its private brands, “providing healthy and convenient choices for customers and leveraging expertise from both sides of the Atlantic,” Boer said. “This includes includes combining our Ahold USA and Delhaize America natural and organic own brands with a total annual sales of $1 billion into our Nature’s Promise brand that we will introduce across our other businesses.”
The company is also building its digital capabilities and expertise and continues to invest to offer customers “a personalized experience” both in the store and online. All of Ahold Delhaize’s U.S. brands have now implemented a digital customer loyalty program.
Ahold Delhaize includes 21 banners in 11 countries. The company serves more than 50 million customers each week in 6,500 grocery and specialty stores and through e-commerce. Its U.S. divisions include Food Lion, Stop & Shop, Hannaford, Giant, Martin’s, Peapod and bfresh.