Ahold Performs on Albert Heijn in Q1
Operating income was EUR 336 million, EUR 23 million higher than in the same period last year. Retail operating income was EUR 370 million, an operating margin of 4.9% compared to 4.8% in the same period last year.
"In the United States, the roll-out of our Value Improvement Program at Stop & Shop/Giant-Landover remains on track. The price investments related to the roll-out continue to impact margins and sales, with improvements expected later in the year. Giant-Carlisle reported solid sales and margin growth and continues to gain share in a very competitive market. We continue to respond to the turbulent economic environment and its impact on consumer and competitor behavior. We are confident that the actions we are taking to bring value to our customers are the right ones.
"In Europe, Albert Heijn produced impressive results for the quarter. As announced in April, we have reached agreement on the sale of our majority interest in Schuitema to CVC Capital Partners, as part of Ahold's strategy to drive further growth at Albert Heijn.
"Following the agreement on the sale of Schuitema, we have adjusted our guidance accordingly: underlying retail operating margin for the year is adjusted up by 30 basis points to 4.8%-5.3%, capital expenditure remains around EUR 1.1 billion and net interest expense is adjusted down by EUR 40 million to a range of EUR 230 million to EUR 250 million".
Net sales were EUR 7.5 billion, down 1.3% from the same period last year. At constant exchange rates, net sales increased by 6.8%.
Operating income was EUR 336 million, EUR 23 million higher than in the same period last year. Retail operating income was EUR 370 million, an operating margin of 4.9% compared to 4.8% in the same period last year. Core Corporate Center costs were EUR 25 million for the quarter, down EUR 8 million from the same period last year. Total Corporate Center costs were negatively impacted by a decline in the discount rate applied to the Company's self-insurance provision.
Income from continuing operations was EUR 221 million, EUR 65 million higher than the same period last year. Net income was EUR 261 million, up EUR 20 million compared to the same quarter last year, which still included income from U.S. Foodservice.
Cash flow before financing was EUR 271 million, EUR 273 million better than the same period last year due to the Company making its final payment (EUR 284 million) under the class action settlement in the first quarter of 2007.
For the first quarter, net sales of USD 5.1 billion were up 1.3% compared with the same period last year for Stop & Shop/Giant-Landover. Net sales included USD 56 million of sales to Tops. Prior to its divestment, such sales were recorded as inter-company sales. Identical sales were up 1.2% at Stop & Shop (0.2% excluding gasoline net sales) and down 1.5% at Giant-Landover (1.6% excluding gasoline net sales), impacted by lower pharmacy sales. Operating income was USD 202 million (or 3.9% of net sales), down USD 26 million from the same period last year. Margins and sales were impacted by price investments related to the roll-out of the Value Improvement Program, with improvements expected later in the year.
For the first quarter net sales for Giant-Carlisle were USD 1.4 billion were up 9.2% compared with the same period last year. Identical sales were up 5.7% (3.7% excluding gasoline net sales). Operating income was USD 72 million (or 5.1% of net sales) up USD 10 million compared to the same period last year.
For the first quarter, net sales for Albert Heijn of EUR 2.7 billion were up 13.5% compared with the same period last year. Identical sales increased at Albert Heijn supermarkets by 11.3%. Operating income was EUR 189 million (or 7.0% of net sales), up EUR 39 million from the prior year, primarily due to strong growth in identical sales as well as lower pension charges.
Net sales for Albert / Hypernova (Czech Republic and Slovakia) increased 18% to EUR 512 million. At constant exchange rates net sales increased 7.9%. Identical sales were up 7.8%. Operating losses were EUR 1 million compared to a loss of EUR 5 million in the same period last year.
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