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Ahold-Delhaize Reports On Q3 Of Fiscal 2022

11/19/2022

On November 9th Ahold-Delhaize, with supermarket operations in the E.U. and the U.S. reported on Q3 ending September 30th.  Assuming parity between the Euro and the U.S. dollar, ($1.03 to  €1) the Group attained a net income of $589 million on net sales of $22,407 million with a diluted EPS of $0.59.  Corresponding figures for the third quarter of FY2021 comprised a net income of $522 million on net sales of $18,545 million.  The Group achieved an operating margin of 4.1 percent compared to 4.2 percent for the corresponding third quarter of 2021.

 

 

 

The U.S. segment attained net sales of $14,745 million, including online sales of $1,077 million.  The U.S. operations achieved an operating income of $566 million compared to $534 million in the third quarter of 2021.  Operating margin was 5.0 percent, up from 4.8 percent during the third quarter of 2021.  Comparable sales growth was 8.6 percent, excluding gasoline, compared to 3.6 percent for the third quarter of 2021.

 

Ahold-Delhaize posted total assets of $51,516 million against long-term debt and lease obligations of $16,529 million.  The company operates 2,050 stores in the U.S. under the Food Lion, Stop & Shop, Hannaford, Giant and Pea Pod banners.  The E.U. operations comprise 5,575 stores including 1,123 specialty units.

 

The company provided FY 2022 guidance of a 4 percent minimum operating margin and low double-digit growth compared to 2021 with $2.5 billion for capital expenditures.

 

In commenting on results, Frans Muller, President and CEO, stated, "High inflation, increasing interest rates, slowing economic growth and the war in Ukraine are putting intense pressure on customers' household budgets. At the same time, retailers and suppliers alike are also facing rising costs of doing business. High energy prices, for example, are not just a cost headwind but are also disrupting supply chains, which are still fragile in many parts of the world. With a deep understanding of commodity prices, built through our extensive experience with own-brand products, our teams play an important role in the value chain and work hard on behalf of customers to ensure realistic pricing. In the face of increasing price pressures, it is everyone's job, across the value chain, to keep prices as low as possible for customers. To this end, we continue to engage diligently and proactively with partners, making clear choices on assortment when necessary. We are also adapting our organization and processes to rising costs by increasing efficiencies and mitigating costs wherever practical and possible.

 

Referring to the U.S Segment, Muller stated, “We took an impairment charge of $187 million on FreshDirect, largely related to the broad based re-rating of sector valuations and reduced scope of that business that is now predominantly focused on the New York Tri-State area” He added "So, while we can't control external factors like energy prices, we have continued to work diligently on things that are under our control, and I am pleased we are making good progress. For example, at Stop & Shop, we continue to advance on our remodeling program, with over 40 percent of the store fleet now remodeled since 2018. An important focus area for Stop & Shop is New York City, where we announced a multi-year $140 million investment earlier this year. With the first five store remodels completed, we are encouraged to see all stores trending ahead of plan, with the sales lift driven by increased units and new customer transactions. In addition, the introduction of Stop & Shop's new Deal Lock savings program, which helps customers capture value by locking in a specific sales price for multiple weeks on both national and private brands, is delivering strong early chain-wide results”.