Shares in Ahold slid this morning after the Dutch retailer reported a drop in second-quarter sales and profits.
Ahold, which runs retail chains in the Netherlands, the US, the Czech Republic and Slovakia, reported a 3.5% fall in net sales to EUR6.87bn (US$9.91bn). When foreign exchange rates were excluded from the results, net sales climbed 4.7%.
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Currency fluctuation also weighed on Ahold’s operating income, which slid 20.7% to EUR275m. Ahold also pointed to restructuring charges, notably in the US, where the company is changing its logistics network and IT systems. Ahold said its retail operating margin was 4.4% in the second quarter, down from 5.3% a year earlier. The retailer, meanwhile, said its net income fell 1.5% to EUR199m.
Ahold’s performance over the first six months of the year was more mixed. Net sales were up 1.7% to EUR16.13bn or by 5.4% when the impact of exchange rates was excluded from the results.
Operating income fell 4.9% to EUR719m and retail operating margin was 4.7%, which compared to 5.1% last year. Net income, however, increased 2.9% to EUR490m.
CEO Dick Boer said Ahold “continued to perform well” and had improved its market share in the US and the Netherlands.
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By GlobalData“We were able to mitigate gross margin pressure through rigorous cost control as customers continue to focus on value in an environment of increasing inflation and intense promotional activity, particularly in the United States,” Boer said. “Sales and margins were impacted by the timing of Easter. In addition, operating income was impacted by unfavourable exchange rates and restructuring charges. We remain well positioned to manage the balance between sales and margins.”
Shares in Ahold were down 3.91% at EUR8.02 at 10:51 CET.
