Ahold Profit Beats Estimates on U.S. Revamp, Dutch Growth
Royal Ahold NV, the Dutch grocery chain in the process of merging with Delhaize Group, reported third- quarter profit that topped analysts’ estimates, helped by a revamp of stores in the U.S. and more goods sold online in the Netherlands.
Underlying operating income rose 12 percent to 319 million euros ($343 million), the Zaandam, Netherlands-based company said in a statement Wednesday. On average, analysts surveyed by Bloomberg estimated earnings of 306 million euros.
Ahold has reduced prices and invested in a better produce selection in the U.S. to tackle the increased competition with chains such as Wal-Mart Stores Inc. After the merger with Belgium’s Delhaize, the company will have more than 4 percent of the U.S. grocery market. Globally the combination will have 6,500 stores and annual sales exceeding 54 billion euros.
U.S. margins and Dutch identical sales growth were the big surprises in the results, Fernand de Boer, an analyst for Petercam, said by phone.
Dutch identical sales rose 4.0 percent. U.S. underlying operating margin improved to 4.0 percent from 3.8 percent a year ago. The company posted more than 30 percent sales growth at its bol.com and Albert Heijn online stores in its home market.
Ahold is on track to deliver results in line with full-year expectations and the proposed merger is still on schedule to be completed mid-2016, it said today.
Ahold has gained 28 percent this year to 18.93 euros in Amsterdam trading, giving it a market value of about 15.8 billion euros.
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