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ZAANDAM, Netherlands—Ahold Delhaize posted modest overall sales gains in its fiscal third quarter, with sales in its U.S. operations down slightly due to strategic shifts, including the closure of underperforming stores and the divestment of FreshDirect. CEO Frans Muller pointed to continued strength in key U.S. brands, such as Food Lion and Hannaford, and said the company remains on track to meet its 2024 goals.
“I am pleased to report a solid performance in the third quarter, placing us well on track to achieve our strategic objectives and financial goals for the year,” said Muller. He acknowledged that Ahold Delhaize’s U.S. operations were affected by factors like the recall of Boar’s Head deli products and the planned closures of 32 Stop & Shop stores. These issues, Muller noted, had a combined negative impact of approximately $70 million on comparable sales.
U.S. net sales reached €13.5 billion ($14.56 billion), a slight decline of 0.1% at constant exchange rates. Comparable sales growth was 1.2% excluding gasoline. Growth in pharmacy sales and improved calendar and weather impacts were offset by headwinds from the FreshDirect divestment and decreased gasoline sales. Despite these challenges, Ahold Delhaize maintained a stable underlying operating margin of 4.2% in the U.S., thanks in part to efficiencies gained from its streamlined operations.
"Momentum is building in the U.S., and I expect further improvements in trends through the holiday season," Muller commented, expressing optimism for a strong fourth quarter. He also highlighted Food Lion’s recent remodeling of 167 stores in the Raleigh-Durham market—an initiative aimed at enhancing the brand’s omnichannel presence.
The company also saw encouraging signs in e-commerce, with its U.S. brands experiencing double-digit online growth despite a 0.1% overall decline in online sales due to the FreshDirect exit. The company expanded its pick-from-store locations by over 70 sites in the past year and strengthened its partnership with DoorDash, resulting in a threefold increase in orders in Q3 compared to Q1.
Group-wide, Ahold Delhaize reported net sales of €22.0 billion ($23.73 billion), up 1.0% at constant exchange rates. Diluted underlying EPS rose by 7% to €0.62. The company reiterated its 2024 outlook, projecting an underlying operating margin of 4.0% or higher and free cash flow of approximately €2.3 billion. In a show of confidence, Ahold Delhaize also announced the continuation of its €1 billion share buyback program into 2025.
“Our brands are well positioned to offer customers everything they need to create wonderful holiday memories with their families and loved ones,” Muller said.
