Dutch supermarket giant Ahold Delhaize has reported better than expected first-quarter sales, with the Albert Heijn and Food Lion owner seeing a boost from its online channels.
The group said that it planned to increase its 2021 online sales outlook, after its 4.6% first-quarter operating margin beat a market forecast of 4.3%.
Net sales rose 5.8% at constant exchange rates to €18.3 billion, with online sales surging by 103%. Forecasts compiled by the company had predicted group sales of €17.4 billion.
Underlying operating income fell 12% to €849 million, but this was better than a company compiled forecast of €740 million.
"We are pleased with the underlying Q1 performance in both the U.S. and Europe," commented chief executive Frans Muller.
"The two-year comparable sales stack sequentially accelerated in Q1 2021 versus Q4 2020 in both the U.S. and Europe, as we've been able to retain a strong level of underlying consumer demand by continuing to adapt to the enduring consumer behaviour changes, including increased working from home, preference for healthy and fresh products, and higher online demand."
Guidance on underlying EPS growth was raised to a 'low to mid-teen' percentage, up from the 'mid to high single-digit' growth previously forecast.
In Europe, comparable sales at the group were up 8.3%, with sales positive in March despite tough comparatives with the same period the previous year. The group has also been boosted by recent acquisitions.
Online sales were up 78.6% in Europe, it added, with its bol.com channel seeing net consumer sales up 76.6% on the same period the previous year. Underlying operating margin in Europe was 4.7%, up 0.6 percentage points on the previous year.
Ahold finance chief Natalie Knight cited the operating margin and US online sales growth of 188% as justification for the more optimistic outlook, which was based on 2019 figures to compensate for pandemic-related anomalies.
It maintained a 2021 underlying operating margin outlook of 'at least 4%', with projected cost savings of more than €750 million.
Online sales are expected to continue to grow strongly in Europe and the United States this year, Knight said, albeit at slightly lower levels than in 2020.
News by Reuters, edited by ESM. For more Retail stories, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.