Dutch supermarket chain Koninklijke Ahold NV (AHODF.PK, AHONY.PK) Thursday reported lower sales for the fourth quarter, as a contracting food market and the sales effect of Hurricane Sandy hurt its business in the U.S., in addition to negative currency impact.
The company's group sales declined 4.2 percent in the fourth quarter to 7.472 billion euros ($10.18 billion) from 7.798 billion euros in the prior year. At constant exchange, sales fell 1.1 percent. Last-year results are adjusted for discontinued operations.
In the U.S., sales fell 6.7 percent to 4.42 billion euros, reflecting a contracting food market and the sales effect of Hurricane Sandy last year. Identical sales decreased 2.1 percent and were down 2 percent excluding gasoline, while comparable sales dropped 2 percent.
Supported by the progress on the cost reduction program, the company expects underlying operating margin for the business to be broadly in line with the performance during the year.
In the Netherlands, sales edged up 0.7 percent to 2.716 billion euros, as market conditions remained challenging, but identical sales decreased 1 percent. Sales growth was mainly driven by the strong performance of the online businesses, both at albert.nl and bol.com.
Amid a tough environment in the Czech Republic, sales fell 7.9 percent to 338 million euros. Meanwhile, net sales of Ahold's unconsolidated joint venture of JMR increased 4.3 percent in the quarter to 891 million euros.
For full year 2013, consolidated net sales edged down 0.2 percent to 32.6 billion euros, but improved 2 percent at constant exchange rates.
In a separate statement, Ahold announced some organizational changes in its European business.
Subsequent to the formation of Ahold's Executive Committee in September 2013, Ahold Europe as a business division will no longer exist.
Ahold said it would refocus its current Ahold Europe operations and its leadership on building the Albert Heijn business in the Netherlands and adjacent markets through its various formats and channels.
Executive Committee member Sander van der Laan will continue to lead Albert Heijn, and report to CEO Dick Boer.
The company's Czech Republic business will report directly to CEO Dick Boer. Bol.com will continue to report to Executive Committee Member and Chief Commercial Officer Hanneke Faber and remains an important area of growth for the company.
The stock fell 0.6 percent on Wednesday to close at 13.16 euros.
For comments and feedback: editorial@rttnews.com