Belgian retailer Delhaize has said net profit decreased by 1.0% to €89.7m (US$105.6m) in the third quarter, while net sales and other revenues increased by 5.1% to €4.7bn.
At constant exchange rates, revenues were up 5.0%, boosted by a 5.1% increase in US sales, supported by stronger sales momentum at Food Lion and the acquisition of Victory in New England. Comparable store sales grew by 1.6% in the US.
Belgian sales increased 5.0%, including the positive impact of the acquisition of Cash Fresh.
“In the third quarter, we have seen that our initiatives to further differentiate our store concepts and improve our execution have resulted in accelerated sales and earnings momentum compared to the second quarter of 2005, particularly at Food Lion, our largest banner,” said Pierre-Olivier Beckers, president and chief executive officer of Delhaize.
“However, expenses related to long-term strategic initiatives such as the Victory and Sweetbay conversions and higher energy price, continued to impact negatively our operating margin, and the sales performance in Belgium remained weak due to soft consumer spending.
“In spite of continuing difficult market conditions in Belgium and higher energy prices, we believe operating profit will increase by 2 to 4% in 2005. Further, we confirm our sales and net earnings guidance of respectively 3.5 to 4.5% growth and 15 to 20% growth in 2005,” added Beckers.
Delhaize ended the third quarter of 2005 with a sales network of 2,629 stores compared to 2,614 stores at the end of June 2005.