Retailer reported market share gains across U.S. brands
“We reported a strong financial performance again this quarter as margins increased significantly, driven by synergies while savings from our “save for our customers” programs are continuously being reinvested in the business,” Ahold Delhaize chief executive officer Dick Boer said in a statement. “We continue to successfully implement our Better Together strategy and expect cumulative net synergies for the full year of 2017 to increase from €220 million to €250 million.”
Ahold Delhaize reported that net sales for the quarter increased by 7.4% to €15.1 billion ($17.5 billion) which the company said is an 10.9% increase at constant exchange rates. (Pro forma net sales decreased by 1.1%) Net income increased by 54% to €362 million (419.8 million), up 59.5% at constant exchange rates.
Analysts had estimated sales at €15.2 billion euros and net income at €331 million, according to Reuters.
The company reported that in the United States market, which accounts for about two-thirds of its sales, inflation was low and sales performance showed further improvements.
“We gained market share across our brands in a competitive landscape with new entrants,” Boer said. “Food Lion continued to report strong volume growth, supported by the rollout of its “Easy, Fresh & Affordable” strategy, whereas Stop & Shop New England benefited from a strong summer holiday season.”
Boer said Ahold Delhaize has strengthened the positions of its online businesses in the U.S. and in Europe, increasing net consumer sales by more than 20% in the quarter.
“We continue to invest in online warehouse capacity and are on track to realize almost €3 billion in online consumer sales this year and nearly €5 billion by 2020,” Boer said. “We are also investing to further improve our portfolios of own-brand products, providing healthy and convenient choices for customers and leveraging expertise from both sides of the Atlantic. This includes combining our Ahold USA and Delhaize America natural and organic own-brands with a total annual sales of $1 billion, into our Nature’s Promise brand that we will introduce across our other businesses.”
Ahold Delhaize also announced a new €2 billion share buy back program for 2018, following completion of the €1 billion program in 2017.