Ahold Q2 operating earnings up 4.4% on U.S. margins, European sales
AMSTERDAM (Reuters) -Supermarket group Ahold Delhaize on Wednesday reported a 4.4% rise second-quarter underlying operating income, citing good U.S. margins and strong European sales growth.
Underlying operating income was 904 million euros ($992 million), topping the 859 million euros expected by analysts in a company-compiled poll.
Ahold, which operates the Stop & Shop, Giant, Food Lion and Hannaford chains in the United States, its biggest market, and the Albert Heijn and Delhaize chains in the Netherlands and Belgium, posted sales up 4.3% at constant exchange rates to 22.1 billion euros.
In the U.S. sales rose 2.7% and underlying operating income totalled 623 million euros, with an underlying margin of 4.6%. In Europe, sales rose 7.0% and underlying operating income was 267 million euros at an underlying margin of 3.2%.
"On a positive note, we see more evidence that inflation has passed its peak," CEO Frans Muller said in a statement. However it is still affecting costs "due to higher energy, commodity, transport and labour costs, all of which are having a particularly notable impact on our European margins".
Jefferies analysts, who rate shares a "hold", said the numbers were in line with expectations, with "depressed European margins less pressured than feared".
Shares were down 3.3% at 30.35 euros at 0707 GMT.
The company raised its forecast for 2023 free cash flow to 2-2.2 billion euros, from around 2 billion euros.
Other forecasts remained unchanged, including a full year underlying operating margin around 4% and EPS at around the same level as in 2022.
($1 = 0.9113 euros)
(Reporting by Toby Sterling; editing by Himani Sarkar, Jason Neely and David Evans)