Inside This Issue - News
Sales solid at Delhaize in quarter
February 10th, 2014
BRUSSELS – Delhaize Group’s fourth quarter U.S. sales climbed 2.8% to $4.3 billion, the company reported, with same-store sales also advancing 2.8%.
The gains at the company’s Food Lion and Hannaford chains came despite a 0.4% fall in U.S. prices resulting from promotions and low inflation.
"Our fourth quarter 2013 sales were strong both in the U.S. and in Belgium," said group president and chief executive officer Frans Muller. "In the U.S., where volume growth continued to be positive, we were especially pleased with Food Lion’s momentum. The phased repositioning, started almost three years ago, is meeting our expectations and we look forward to further developing Food Lion’s customer proposition this year."
"At Hannaford, both comparable-store sales growth and real growth were positive as a result of price investments and increased promotions, despite a more difficult competitive environment in the Northeast," he added.
For the full year, Delhaize America generated revenues of $17.1 billion, up 1.9% over 2012 in local currency supported by comparable-store sales growth of 2% (adjusted for a positive calendar impact of 0.1%).
Last May, Delhaize reached an agreement to sell the Sweetbay, Harveys and Reid’s chains (154 stores in total) and the leases of 10 previously closed Sweetbay locations to Bi-Lo Holdings. The deal is expected to close during the first half of 2014.
"At approximately €770 million at identical exchange rates, Delhaize’s preliminary unaudited underlying operating profit for 2013 is consistent with the guidance provided during the year," noted Muller. "As a result of our solid EBITDA [earnings before interest, taxes, depreciation and amortization], capital allocation discipline and further focus on working capital improvements, we generated a free cash flow of approximately €670 million in 2013. This will provide us with further means to support our core businesses, expand our store network in select markets and strengthen the balance sheet."
The chain this year "will seek to further reduce complexity and costs, remain disciplined with respect to capital allocation and ultimately continue to deliver healthy free cash flow," he said.