Delhaize Posts 2.2% Revenue Growth, Despite Belgian Decline
Belgian retailer Delhaize has posted revenue growth of 2.2 per cent (at identical exchange rates) in Q1 2015, according to the latest results.
Comparable same-store sales at the retailer rose 2.5 per cent in the US, however, this was offset by a 2.8-per-cent decline in its Belgian market, and a 0.8-per-cent decline in south-eastern Europe.
The retailer posted a group underlying operating profit of €173 million for the period.
In Belgium, Delhaize chief executive Frans Muller said that the retailer is “implementing significant changes required to revitalise our business. During the first quarter, our profitability was impacted by investments in prices, promotions and marketing expenses, but we saw a gradual improvement in our revenue and market-share trends. We expect revenues and profitability to improve in the second half of the year.”
Overall, however, Muller said, “Our focus for the group is unchanged: continue to grow sales and improve market share in our core markets, funded by operational efficiencies and continued capital discipline, as reflected by [Standard & Poor's] recent decision to change our outlook from 'stable' to 'positive'.”
Commenting on the retailer’s performance, Barclays European Food Retail Equity Research said, “Even though we expect the share price will likely remain under pressure following these weaker-than-expected numbers and recently less positive FX fluctuations, we consider Delhaize’s investment case remains attractive with strong earnings momentum, restructuring potential and undemanding valuation.”
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones.