Dutch retail giant Ahold has posted a leap in third-quarter profits as rising earnings from flagship chain Albert Heijn offset a mixed US performance.
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Ahold booked operating income of EUR255m (US$377m), up 21% on a year ago. Quarterly earnings from its Albert Heijn stores jumped by almost a quarter, thanks in part to higher sales.
In the US, where Ahold is overhauling its business, the company saw profits rise at its smaller chain, Giant-Carlisle. However, earnings from its main US business, Stop & Shop / Giant-Landover, fell 11% as margins were hit by the overhaul.
Ahold is embarking on a revamp of its US businesses, reducing prices and selling more own-brand products.
Ahold saw losses from its Czech and Slovak operations narrow as the business cycled the third quarter of 2006, when it incurred an impairment loss of some EUR19m.
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By GlobalDataPresident and CEO John Rishton pointed to an “impressive performance” from Albert Heijn and insisted the company as a whole was “making good progress”.
He added that 2007 margins are forecast to be at the “higher end” of Ahold’s guidance of 4-5%.
Ahold issued its third-quarter sales figures in late October. The company booked net sales of EUR6.3bn, a rise of 1.1% on a year earlier. The weak dollar weighed on the numbers, however. At constant exchange rates, net sales were up 5.6%.
