November 6, 2019 / 6:10 AM / 10 days ago

Ahold reports higher third-quarter earnings on strong U.S. business

AMSTERDAM (Reuters) - Dutch supermarket operator Ahold Delhaize (AD.AS) on Wednesday said its third-quarter core earnings rose 3.7%, ahead of analysts’ forecasts, citing strong sales and a good performance at its Food Lion and Hannaford chains in the United States.

The company recorded underlying operating income of 724 million euros ($802 million), up from 698 million euros in the corresponding period a year earlier. Analysts polled by the company had seen the figure at 703 million euros.

Sales rose 2.9% to 16.7 billion euros for Ahold, which does two-thirds of its business in the United States with stores concentrated on the East Coast and southern states.

“We saw a strong overall performance at our U.S. brands, particularly Food Lion and Hannaford,” CEO Frans Muller said.

“Stop & Shop is operating in challenging sales environment but we are encouraged by improving transactions as we move into the fourth quarter.”

The company reported 1.5% comparable sales growth in the United States, with underlying operating income up 4.4% to $448 million, and repeated its 2019 goal of generating 1.8 billion euros in free cash flow.

It now expects to cut 600 million euros in costs in 2019, better than its prior target of 540 million euros.

Ahold’s results come a day after rival Kroger unveiled better-than-expected earnings and forecasts, sending its shares up 10%.

In the Netherlands, Ahold sales rose 3% on a comparable basis to 3.62 billion, with underlying operating margins at 5.6%.

Reporting by Toby Sterling; Editing by Himani Sarkar

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