Dutch retailer Royal Ahold has today (1 December) posted third quarter profits of EUR207m (US$272m), up from a net loss of EUR241m in the same period of last year, when the company was hit by a EUR585m class action settlement linked to an accounting scandal at its US Foodservice unit.
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Net sales edged up 0.7% from last year’s results to EUR10.3bn.
Ahold operates several European grocery chains, including its flagship supermarket Albert Heijn, along with a number of supermarkets in the US, including Stop & Shop, Giant-Landover, Tops and Giant-Carlisle.
Despite the return to profitability, Ahold said intensifying competition and a weaker economy was hitting its margins in the US. The retailer warned of a tough fourth quarter ahead, with these conditions expected to continue putting pressure on margins. The Stop & Shop and Giant-Landover operating margin fell from 5.3% to 4.4%, the retailer said.
“As we anticipated, the third quarter was more challenging than the second quarter for US retail, reflecting increased competitor activity and weaker economic conditions, leading to margin pressure,” Ahold CEO Anders Moberg said in a statement. “We expect the fourth quarter to be equally challenging.”
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By GlobalDataEarlier last month, Ahold unveiled plans to sell its US Foodservice unit and its Tops stores in New York and Pennsylvania. The company also intends to divest from its retail activities in Poland, Slovakia and Portugal, signalling a return to its core US and European retail businesses.
