Swedish retailer Axfood has kicked off its financial year with strong growth, market share gain and increased earnings across every business segment in the first quarter.
The company saw net sales growth of 25.7%, to SEK 16.6 billion (€1.6 billion), including the acquisition of Bergendahls Food.
Its retail division generated sales worth SEK 12.7 billion (€1.2 billion), up 4.1% compared with the same period last year.
Commenting on the company's performance, Axfood CEO Klas Balkow, said, “We continued to maintain a rapid pace in all parts of the operations during the first quarter and we have started the year with retail sales growth that is significantly higher than the market.
"This shows that our food and store concepts continue to attract existing and new consumers who value affordable, good and sustainable food."
Adjusted operating profit increased by 15.5% year on year to SEK 653 million (€63.7 million), while adjusted operating margin declined to 3.9% from 4.3% last year.
Net profit for the quarter amounted to SEK 682 million (€66.5 million), while earnings per share before dilution was SEK 3.30.
Balkow added, "All operating segments reported higher operating profit for the quarter, with strong sales and healthy productivity gains compensating for significantly higher fuel costs and a weak SEK.
"As a result, we can report higher adjusted operating profit of SEK 653 million and an adjusted operating margin of 3.9%, that was diluted by the consolidation of Bergendahls Food."
According to Balkow, Sweden has witnessed a sharp increase in food price inflation in recent months, driven by higher prices for raw materials, packaging materials, fuel, electricity and transport.
"What is now happening in Ukraine is causing increased uncertainty and instability, and there is much to suggest that prices will continue to rise,” he added.
Axfood's Annual General Meeting, held on 23 March, approved a dividend of SEK 7.75 per share, payable in two parts.
The first payment of SEK 4.00 was made to shareholders in March, and the second payment of SEK 3.75 will take place in September, the company added.