06 jun: Novo/Danske: Kursmål øges på stærkt produktudbud
06 jun: ECB fastholder renten
06-06-2012 13:45:00

Retailer Ahold Profit Down as Price Competition Weighs

Relateret indhold

-- Profits fall due to margin pressure

-- Intense price competition will remain throughout 2012

-- Current margin levels will continue in 2012

-- Sales trend is improving during 1Q and into 2Q

AMSTERDAM--Retailer Royal Ahold NV (AH.AE), which runs the Stop & Shop and Giant supermarket chains in the U.S., Wednesday posted a slight fall in first-quarter net profit as intense price competition weighed on margins.

Ahold expects 2012 to be challenging, with price competition continuing and consumer spending under pressure, said Chief Executive Mr Dick Boer, although he added that he's encouraged by the improving sales trend in the second quarter. He expects the current low margin levels to continue as Ahold keeps investing to maintain low prices.

The company is outperforming Belgian rival Delhaize Group (DELB.BT) in the U.S., even though its flagship chains have faced fierce competition as retailers battled to lure increasingly price-sensitive customers. Delhaize, like Ahold, makes more than half of its sales in the U.S., but Ahold gained market share there during the first quarter with increased promotional activity. The company doesn't give a figure for its U.S. market share.

In the Netherlands, which accounts for a third of Ahold's sales, the retailer is suffering from low consumer confidence as shoppers grapple with the government's austerity measures, although it managed to maintain its market share. Its core chain, Albert Heijn, has around 33% market share, which is expected to grow due to the recent acquisition of 82 stores from competitor Jumbo.

Ahold said it is on target to deliver EUR350 million in cost savings for the next three years.

In the three months to March 31, the retailer's net profit fell 3.1% to EUR282 million from EUR291 million a year earlier. Analysts had forecast a rise to EUR305 million, according to FactSet.

Net sales totaled EUR9.71 billion, up 5% from a year earlier, short of analysts' expectations for EUR9.81 billion. Sales growth was a healthy 2.8% in the U.S. and a modest 1.2% in the Netherlands. Underlying margin dropped to 4.3% from 4.6% and operating result was down 6.3% to EUR416 million.

Analysts were disappointed with the numbers.

"The results are meager, but not dramatic given the intense price competitive market environment", said ABN Amro analyst Robert Jan Vos, who rates Ahold stock at hold with a EUR12 price target.

Richard Withagen from SNS Securities said the U.S. sales growth is disappointing and Netherlands growth weak. He rates the stock at buy, with a EUR11.50 price target.

However, analysts at Rabobank said they see room for the first signs of accelerating sales growth and stable margins in the second half. Rabo, which rates the stock at buy with a EUR12 target, said the shares are not overly expensive and offer a good buy in a troubled sector.

Ahold's sales and profits are expected to benefit from the consolidation of its recent acquisitions, online retailer Bol.com and 82 stores in the Netherlands from Jumbo.

Delhaize last month swung to a first-quarter net loss, which it attributed to charges related to store closures in the U.S. under its unprofitable Food Lion brand, as well as openings under its discount Bottom Dollar chain. Its volumes have taken a tumble after it raised prices at Food Lion in an effort to pass on cost inflation to customers, but improved in the first quarter from the fourth quarter of 2011. The Belgian company said underlying operating profit is this year expected to decrease by 15% to 20% at identical exchange rates compared with 2011--far below market expectations.

Ahold is in the process of putting its EUR2.6-billion cash pile to better use, with a focus on organic growth and acquisitions. It opens a fifth store Wednesday in Belgium, aiming for 10 by the end of 2012 and 50 in the next five years. It will open its first German store in the third quarter.

At 0800 GMT, Ahold shares were down 2.6% at EUR9.34, against the benchmark AEX index which was up 1.5%.

Write to Robert van den Oever at robert.vandenoever@dowjones.com

(END) Dow Jones Newswires

June 06, 2012 07:45 ET (11:45 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

Opret kommentar

Relateret debat

  • 1 uge
  • 1 måned
  • 1 År
Ingen indlæg

Vestas-konkurrent tjente mindre på vedvarende energi

22-07-2016 12:59:52
Amerikanske General Electric kom bedre end ventet ud af årets andet kvartal på både top- og bundlinjen.Men for industrikæmpens division for vedvarende energi gj..

Aktier/middag: FLSmidth og TDC til tops i stille sommermarked

22-07-2016 11:37:41
De danske aktier danser omkring nullet fredag ved middagstid, hvor TDC og FLSmidth skiller sig positivt ud i toppen af eliteindekset.I morgenens handel var retn..

Danske/Arctic: Anbefalingen ryger på "hold" efter regnskab

22-07-2016 06:57:12
Det norske investeringsbank Arctic Securities sænker anbefalingen af Danske Bank-aktien efter regnskabet for andet kvartal torsdag.Anbefalingen er ifølge Bloomb..

Mest læste nyheder

  • 24 timer
  • 48 timer
  • 1 uge

Relaterede aktiekurser

Ahold KON 21,70 0,3% Stigning i aktiekurs
Delhaize Group 102,80 0,3% Stigning i aktiekurs
Etablissements Delhaize .. 28,11 -0,1% Fald i aktiekurs

Køb- og salgsanbefalinger

  • Trend
  • Pengemaskinen

Copyright Euroinvestor A/S 2016  Disclaimer Privatlivspolitik
Aktieinformation leveres af Interactive Data.
Data er forsinket 15-20 minutter iht. de enkelte børsers regler om videredistribution.
24. juli 2016 22:22:30
(UTC+01:00) Brussels, Copenhagen, Madrid, Paris
Version: LiveBranchBuild_20160714.4 - EUROWEB7 - 2016-07-24 22:22:30 - 2016-07-24 22:22:30 - 1 - Website: OKAY

Når du besøger Euroinvestor.dk accepterer du, at der anvendes cookies, som vi og vores samarbejdspartnere benytter til funktionalitet, statistik og markedsføring. Læs mere om cookies på Euroinvestor.dk her