Shares in Delhaize Group fell today (3 May) after the Belgium-based retailer forecast its underlying operating profit could be down by as much as 20% this year.

Delhaize said its plans to invest in price would result in a 15-20% drop in underlying profit during 2012.

Shares in the company were down 10.88% at EUR33.02 at 16:31 CET this afternoon in the wake of the announcement.

Delhaize also reported a first-quarter loss on charges linked to store closures and restructuring in the US.

The group booked a first-quarter net loss of EUR10m (US$13.1m), down from a profit of EUR126m last year and falling short of consensus estimates of profit of around EUR20m.

Operating profit dropped to EUR23m, down from EUR218m and operating margins fell from 4.4% to 3.5%, the company revealed.

Delhaize has embarked on a major overhaul of its Food Lion banner in the US. During the period the group closed 126 stores, resulting in charges of EUR167m. The company insisted stores it has revamped in the first quarter have seen positive sales trends and it revealed it plans to refurbish 510 outlets in the remainder of 2012.

Sales during the first quarter were boosted by price increases and acquisitions, rising 5.9% to EUR5.48bn. 

The group added that it remains on track to hit its EUR500m cost savings target during the year.

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