Ahold Delhaize (AD.AS), a major operator of supermarket chains in the United States and Europe, on Wednesday reported better than expected first-quarter sales on the back of a strong performance online.
The operator of Food Lion, Giant, and Hannaford chains, among others, said it was increasing its 2021 online sales outlook based on the performance after its 4.6% first-quarter operating margin beating a market forecast of 4.3%.
“While COVID-19 continues to create significant uncertainty for the remainder of 2021, the strong Q1 results provide management the confidence to raise the underlying EPS (earnings per share) growth outlook for the year,” the company said.
Net sales rose 5.8% at constant exchange rates to 18.3 billion euros ($22.2 billion), with online sales surging by 103%. Forecasts compiled by the company had predicted group sales of 17.4 billion euros.
Underlying operating income fell 12% to 849 million euros but was better than a company compiled forecast of 740 million euros.
Guidance on underlying EPS growth was raised to a “low to mid-teen” percentage, up from the “mid to high single-digit” growth previously forecast.
Ahold finance chief Natalie Knight cited the operating margin and U.S. online sales growth of 188% as justification for the more optimistic outlook, which was based on 2019 figures to compensate for pandemic-related anomalies.
It maintained a 2021 underlying operating margin outlook of “at least 4%”, with projected cost savings of more than 750 million euros.
Online sales are expected to continue to grow strongly in Europe and the United States this year, Knight said, albeit at slightly lower levels than in 2020.
($1 = 0.8247 euros)