Royal Ahold Delhaize Shares Fall on Profit Drop, Consensus Miss
November 08 2023 - 4:40AM
Dow Jones News
By Michael Susin and Ian Walker
Royal Ahold Delhaize shares fell in early trade after the
company reported a third-quarter profit fall that missed consensus
estimates, and despite announcing a new share buyback.
Shares of the Dutch grocer at 0857 GMT on Wednesday were down
EUR2.24, or 7.8%, at EUR26.36.
Ahold's net profit for the quarter fell to 394 million euros
($421.6 million), compared with EUR589 million for the same period
a year ago and a company-provided consensus estimate of EUR590
million.
The fall reflects a EUR153 million impairment charge related to
FreshDirect in the U.S. which it has agreed to sell to Getir, and
EUR61 million of restructuring cost related to the company's
Belgium transformation and other initiatives.
It said that 51 Delhaize Belgium stores have now signed
agreements with independent buyers and started transitioning the
first stores to the new operators in October.
Ahold also said that it expects to book a pretax loss of between
$275 million and $325 million in its accounts from the sale of
FreshDirect which is expected to complete in the fourth quarter of
this year.
Net sales came in at EUR21.93 billion compared with EUR22.41
billion and a consensus of EUR21.95 billion. Within this U.S. sales
were up 0.5% at EUR13.625 billion, while European sales were 7.1%
higher at EUR8.31 billion.
Ahold has also increased its free cash flow target for 2023 to a
range of EUR2.2 billion to EUR2.4 billion form a previous range of
between EUR2.0 billion and EUR2.2 billion.
Ahold Delhaize outlined a EUR1 billion share buyback program,
scheduled to start at the beginning of 2024.
"Taking stock of what we have learned so far, we are currently
refreshing our priorities to calibrate to the macro and competitive
environment. This will require some shifts in focus," President and
Chief Executive Officer Frans Muller said.
The company plans to hold a strategy day next May to present the
board's plan for the next phase of growth and value creation.
Write to Michael Susin at michael.susin@wsj.com and Ian Walker
at ian.walker@wsj.com
(END) Dow Jones Newswires
November 08, 2023 04:25 ET (09:25 GMT)
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