Supermarket group Ahold Delhaize beat expectations with its first-quarter sales, reporting a higher margin for its U.S. stores while inflation hurt European profitability.
The Netherlands-headquartered company, which operates Stop & Shop, Giant, Food Lion and Hannaford in the U.S. and Albert Heijn in the Netherlands, posted quarterly sales of €21.62 billion to beat a €21.5 billion consensus from analyst forecasts compiled by the company.
Chief executive Frans Muller said Ahold Delhaize's brands are well positioned as U.S. inflation rates start to moderate.
“Our brands' ability to adapt their assortments and omnichannel customer journeys to rising consumer price sensitivity is resonating well with customers, and this is clearly reflected in our Q1 results," Muller commented.
"Comparable store sales excluding gas grew 6.2% in Q1. Leveraging these strong sales, we delivered an underlying operating margin of 4.0% and diluted underlying EPS growth of 10.5%. Our strong earnings performance was largely driven by a strong operating performance in the U.S, which partially offset increased energy costs in Europe and the impact of strikes in Belgium."
Ahold Delhaize's underlying operating margin rose to 4.8% in the U.S. while in Europe it fell to 2.8%.
Quarterly operating income was €822 million, in line with expectations of €823 million.
Looking ahead, Muller said that while inflation rates remain in double digits, the group is taking a "lot of courage", adding that measures to "raise the bar competitively" will "ensure the long- term success of our brands, for the benefit of all our stakeholders".
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