Dutch supermarket group Ahold Delhaize reported slightly higher-than-expected sales for the fourth quarter, thanks to strong holiday sales at its US grocery stores and market share gains by its Dutch chain Albert Heijn.
Revenue for the three months through 31 December was €23.28 billion ($24.12 billion), ahead of analysts' consensus estimate of €23.21 billion in a company-compiled poll.
Shares in the company, however, were trading 4% lower in early trade, which analysts attributed to a potential margin drop.
'While the outlook for FY25 is in line with expectations, Ahold Delhaize now banks group margin of 'around 4.0%', while it historically guided for margins of 'at least 4.0%',' analysts at KBC said in a note.
Ahold Delhaize said it expects an underlying operating margin of around 4% in 2025, the same level as 2024, and aims to save €1.25 billion through a cost-saving programme.
Regional Performance
The US was 'materially below expectations', due to an increase in pharmacy sales and wage inflation, while the European division 'performed much better than anticipated, with sales and underlying operating profit respectively 0.6% and 9.6% above consensus,' said ING.
In the US, where Ahold Delhaize generates more than half of its revenue, major retailers including Target and Walmart have been pushing to keep prices of essentials low as many Americans shun big-ticket spending and turn to discount shopping in the face of sticky inflation.
The Food Lion and Stop & Shop parent company said it would invest more in lowering product prices this year.
The group announced higher capital expenditure for 2025, at around €2.7 billion, for new store openings and investments in technology.
