Ahold Delhaize Earnings: Ahead of Expectations, but Guidance Reiterated

Ahold Delhaize released first-quarter results with sales, excluding gas, up 0.4% (up 1.3% at constant exchange rates). Sales were slightly ahead of company-compiled consensus expectations (EUR 21.728 billion versus EUR 21.530 billion for consensus), with underlying operating income of EUR 861 million (4% margin), ahead of the EUR 824 million estimate from consensus. This was driven by improvements in Europe (EUR 268 million versus expectations for EUR 260 million) and better-than-expected US performance (EUR 614 million versus EUR 594 million for consensus). Comparable sales growth for the first quarter was 0.8% for the US and 2.8% for Europe, versus 0% and 2.2% for consensus, respectively. In a strategic shift toward growth, the company is simplifying its operations and enhancing its Save for Our Customers program, notably through the Belgium Future Plan, which has successfully transitioned 76 of 128 stores to franchises, leading to increased customer frequency and larger basket sizes. Despite inflationary pressures, this has contributed to a 0.3 percentage point improvement in first-quarter margins across European operations, supporting consistent group-level margins and enabling enhanced investments in US customer value propositions amid reductions in supplemental nutrition assistance program benefits.