Ahold reports Q2 sales of $18 billion, in line with expectations

  • Sales declined 3.7 percent from a year earlier to 15.5 billion euros ($18.0 billion) in the second quarter, while net profit rose to 410 million euros from 355 million euros as underlying margins improved fractionally in the United States.
  • "We had a strong quarter and the quarter was positive on sales but, at the same time, slightly impacted by the different timing of Easter," Frans Muller, chief executive of Ahold Delhaize told CNBC's Squawk Box Europe on Wednesday.
  • Shares have gradually recovered from a shock in the summer of 2017 when Amazon announced its acquisition of Whole Foods. Ahold shares have gained 14 percent so far this year.

Ahold Delhaize, the Dutch operator of grocery chains in the United States and Europe, on Wednesday reported quarterly sales and earnings almost in line with analysts' expectations.

Sales declined 3.7 percent from a year earlier to 15.5 billion euros ($18.0 billion) in the second quarter, while net profit rose to 410 million euros from 355 million euros as underlying margins improved fractionally in the United States.

Analysts polled for Reuters had expected sales of 15.5 billion euros and profit of 414 million euros.

The company said the numbers were impacted by the inclusion of Easter holiday in the second quarter of 2017, and sales would have risen 2.4 percent if adjusted for currency and other changes.

Analysts had expected sales growth of at least 1 percent-2 percent in the United States, where Ahold does two-thirds of its business on the East Coast and in southern states under the Stop & Shop, Giant, Hannaford and Food Lion brands.

"We had a strong quarter and the quarter was positive on sales but, at the same time, slightly impacted by the different timing of Easter," Frans Muller, chief executive of Ahold Delhaize told CNBC's Squawk Box Europe on Wednesday.

Muller, a former Delhaize executive, took the top job from Dick Boer, who retired in April.

"I think it is clear that the U.S. market is very competitive, both from an online perspective but also from a store perspective … And this quarter we did not lose market share, we gained market share or we were flat in market share so I think we did the right things to compete," he added.

US rivals

Muller joined Ahold in 2016 after the $28 billion merger of Ahold's and Delhaize's U.S. properties, overseeing the integration.

With much of the synergies between the two companies already achieved, analysts are now watching to see whether Ahold, dominant in the Netherlands, can keep up with tougher competition in the United States.

Shares have gradually recovered from a shock in the summer of 2017 when Amazon announced its acquisition of Whole Foods. Ahold shares have gained 14 percent so far this year.

But on Tuesday, shares dropped 3.4 percent to 20.99 euros after Berenberg analysts initiated coverage with a "sell" recommendation, saying the company needed to invest 1.6 billion euros in its U.S. operations quickly to keep pace.

U.S. rivals include not only Amazon, Walmart and traditional supermarket competitors such as Safeway and Kroger -- sometimes rumored as possible merger partners -- but also German discounters Aldi and Lidl who are pushing into its markets.

Ahold kept its forecast of 1.9 billion euros in free cash flow for 2018.