Sales and net income gains beat expectations
“I’m pleased with these results, as we delivered strong sales and earnings growth, which has allows us to increase our free cash flow guidance for the year,” Ahold Delhaize chief executive officer Frans Muller said during a conference call. “This underscores the strength of our great local brands and our leading positions on both sides of the Atlantic.”
Comparable store sales were up 3% in the United States, or up 2.5% when gasoline and the impacts from Hurricane Florence are excluded. Net consumer online sales were up 27.6% for the company as a whole, boosted by strong results for its bol.com in the Netherlands.
“This puts us firmly on track to realize at least €5 billion in net consumer online sales by 2020, and thus exceeding our target,” Muller said.
During the quarter the company debuted a new look for its Stop & Shop chain with the remodels of 21 stores in the Hartford, Conn., area. The company says the revamps are part of a $70 million capital investment that aims to improve the in-store experience with a focus on delivering more fresh, fast, local and healthy food options. The changes include a modernized store format and a new logo, which is a nod to the brand’s past and its legacy of leading in convenience, the company said, adding that lessons from this from this first wave of remodels will be reflected in the rollout of the new look into other markets next year.
The company noted that Food Lion has now rolled out its “Easy, Fresh and Affordable” format to 712 of its 1,029 stores. That includes 168 stores in Virginia’s Norfolk and greater Roanoke markets that were remodeled this year. Food Lion also introduced the Food Lion To-Go grocery pickup service in North Carolina and Virginia, which allows customers to order and pick up their groceries in as little as one hour.
“We had a successful quarter with sales growth across the board and strong growth of underlying operating income and net income,” Muller said. “Based on our strong cash generation, we expect free cash flow for 2018 to be at least €2 billion exceeding our previous guidance of €1.9 billion.”