Ahold Delhaize Q1 Profit Beats Forecasts on Strong US Sales

Core Profit Exceeds Expectations

Supermarket group Ahold Delhaize announced its first-quarter underlying operating income rose 0.7% to 896 million euros, surpassing analysts' consensus of 858 million euros. At constant currency rates, core earnings increased by 8.1% compared to the previous year.

Resilient US Market Performance

The strong results were primarily driven by the resilient performance of its United States business, which includes chains like Stop & Shop, Giant, and Food Lion. This performance successfully offset the negative impact of falling U.S. consumer confidence and a weak dollar, as the group generates more than half of its revenue in the U.S.

Currency and Geopolitical Headwinds

The translation of U.S. dollar earnings into euros negatively impacted reported figures, causing first-quarter sales to fall by 4.3%. However, sales at constant exchange rates saw a 2% rise. CEO Frans Muller acknowledged that disruptions from geopolitical volatility are a reality the business is managing through previous experience.

Outlook and Leadership Transition

The company noted that rising commodity prices, driven by disruptions in shipping, are expected to impact consumers soon. Additionally, Ahold Delhaize announced that Kingfisher CEO Thierry Garnier will succeed Frans Muller as the chief executive starting in April 2027.

FAQ

Q: What was Ahold Delhaize's Q1 core profit?
A: The company reported an underlying operating income of 896 million euros, marking a 0.7% increase on a reported basis.

Q: Why did the company's profit beat expectations?
A: The profit beat was driven by strong sales from its U.S. supermarket chains, which remained robust despite wider economic pressures.

Source: Investing.com