Dutch supermarket chain operator Koninklijke Ahold N.V. (AHODF.PK, AHONY.PK) reported Tuesday a higher profit for the first quarter, helped particularly by increased sales and margins in the U.S., in part due to timing of Easter.
Chief Executive Officer Dick Boer said, "We delivered solid results and increased volumes in all our markets despite challenging market conditions with customers continuing to focus on value."
Net income for the quarter attributable to common shareholders increased 6.2 percent to 291 million euros or 0.25 euros per share from 274 million euros or 0.23 euros per share a year ago.
On a continuing operations basis, income climbed 18.3 percent to 298 million euros or 0.25 euros per share.
Net sales for the quarter grew 5.9 percent to 9.25 billion euros from 8.74 billion euros in the prior year, positively impacted by the post-Easter week shift into the next quarter, the company said. The sales growth was 6 percent at constant exchange rates.
In the quarter, retail operating income increased from last year primarily driven by higher operating results in Ahold USA, despite lower income in the Netherlands. The retail operating margin rose to 5 percent from last year's 4.9 percent.
Segment-wise, Ahold USA generated quarterly sales of $7.59 billion, up 7.4 percent from the prior year. The growth was 6.7 percent in euro terms to 5.49 billion euros.
In the United States, identical sales, or net sales from exactly the same stores in local currency for the comparable period, rose 5 percent, and the growth was 3.2 percent excluding gasoline. Comparable sales, i.e., identical sales plus net sales from replacement stores in local currency, increased 5.2 percent. In the country, the company's strong sales and margins partially reflected the timing of Easter.
Net sales in the Netherlands increased 3.9 percent to 3.22 billion euros, and identical sales were up 2.8 percent. Meanwhile, margins were impacted by increasing inflation which was not fully passed on to customers.
Net sales from other European region, including Czech Republic and Slovakia, increased 9.8 percent, and the growth was 4.5 percent at constant exchange rates. Identical sales increased 4.9 percent, or 4.6 percent excluding gasoline.
Looking ahead, Boer said, "We will continue to manage the balance between sales and margins in a challenging environment of inflation and intense promotional activity, especially in the United States."
AHONY.PK closed Monday's regular trading at $14.09, down $0.08 or 0.56 percent.
Ahold settled at 9.75 euros on Monday, down 0.01 euros or 0.12 percent in Amsterdam.
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