Delhaize today (13 August) cut its full-year profit guidance due to tough trading conditions in the south-east of the US and in Greece, a key European market for the Belgium-based retailer.

The company is now forecasting that operating profit could fall in 2010 and has set a range from a drop of 2% to a rise of 2%. Delhaize’s previous guidance was of growth of 2-5%.

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Operating profit in the second quarter, ended 30 June, fell 7% at actual exchange rates but was down 12.2% on a constant-currency basis at EUR227m (US$291.3m).

Net profit fell 8.2% at actual exchange rates, but dropped 13.4% at identical exchange rates to EUR114m.

The company posted flat revenue at identical exchange rates, although at actual exchange rates, revenue rose 4.7% to EUR5.3bn (US6.8bn) due to the strengthening of the US dollar against the euro.

Revenue fell 0.2% on an organic basis. US revenue fell 2.8% due to a 3.6% fall in comparable-store sales. However, revenues from Delhaize’s Belgium business climbed 5.8%, while its Greek operations saw revenue rise 5.5%. Delhaize also posted 19.9% revenue growth in Romania and Indonesia.

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The company said its ‘New Game Plan’ cost programme was “progressing as planned”. It has identified an additional EUR200m of cost savings through setting up a single procurement organisation for its US operations.

Delhaize president and CEO Pierre-Olivier Beckers said: “While we are disappointed in our Southeast US sales numbers, we believe they are not reflective of the underlying strength and the long-term growth potential of the business. We are committed to our strategic price investments started at the beginning of the year at Food Lion and believe that we have the right value proposition to respond to the needs of pressured consumers.”

Shares in the company had fallen 8.25% to EUR53.47 this morning at 11:23 CET.

Click here to view the full release and check back later for further insight into the company’s results.

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