Comparable sales growth (excluding gas) was up 20.6% in the United States and 10.2% in Europe. The company saw net consumer online sales increase by 77.6% at constant exchange rates; Ahold Delhaize will reach €7 billion net consumer online sales goal in 2020, one year ahead of plan.
The company’s costs related to the COVID-19 pandemic totaled about €330 million in the first half of the year, and approximately €260 million in the second quarter. That figure includes money spent on enhanced safety measures and higher pay for associates, the company said.
Ahold Delhaize reported operating income of about €1 billion for the quarter, which is an increase of 78% at constant exchange rates.
“Our Q2 performance illustrates the challenge all companies are facing in predicting results in the highly uncertain environment created by COVID-19,” Ahold Delhaize president and CEO Frans Muller said in a statement. “Despite the high levels of market uncertainty, we are accelerating investments to support our increasingly digital and omnichannel ambitions and raising our 2020 outlook due to our strong performance in the first half of the year. We now expect that our group underlying operating margin will be higher than in 2019, with underlying EPS growth in the low-to-mid-20% range. We are also raising our free cash flow target to at least €1.7 billion, net of paying the majority of the recently announced tentative U.S. pension plan withdrawal agreement.
“We continue to adapt to the changes we are seeing in consumer shopping patterns and behavior. One of these changes is the increased demand for our online offerings, which, combined with investments to increase capacity, has resulted in net consumer online sales growth of 127% in the U.S., at constant exchange rates, and 64% in Europe. Our increased investments in digital and omnichannel capabilities should lead to continued wallet share gains. As a result, we now expect over 55% growth in global net consumer online sales in 2020. This puts us on track to reach our goal of doubling global net consumer online sales from €3.5 billion in 2018 to €7 billion in 2020, one year earlier than we outlined at our November 2018 Capital Markets Day.
“We also remain dedicated to health and sustainability in these challenging times. During the second quarter, we published our inaugural Human Rights Report, outlining the steps we are taking to safeguard human rights. We also issued our first Sustainability Bond Report in June 2020, documenting how we used bond financing from 2019 to support sustainable products, reduce climate impacts and promote healthier eating. We have subsequently announced our commitment to achieve long-term, science-based targets on climate change, including the goal to reduce our own carbon emissions by 50% by 2030 and a new goal to reduce emissions from our overall value chain by 15%. After officially becoming a supporter of the Task Force on Climate-related Financial Disclosures (TCFD), we are in the process of developing voluntary and consistent climate-related risk disclosures.
“Our second-quarter results reflect excellent operational execution by associates during the COVID-19 crisis. We will continue to make protecting and investing in the health and safety of associates and customers, as well as supporting our local communities, our top priorities.”