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Ahold Delhaize: reports strong EPS growth in Q4-2019

Zaandam / NL. (ad) Dutch Ahold Delhaize Group, one of the world’s largest food retail groups and a leader in both supermarkets and eCommerce, reports fourth quarter results.

Frans Muller, President and CEO of Ahold Delhaize, said: «We ended the year on a high note, with strong group performance in the fourth quarter. We exceeded our full-year 2019 guidance outlook for underlying earnings per share and met our free cash flow guidance. We posted 17.1 percent growth in underlying earnings per share from continuing operations in the fourth quarter, resulting in an increase of 8.4 percent for the full year, above our full-year guidance of low-single-digit growth. We also generated EUR 1.8 billion in free cash flow in 2019, achieving our guidance outlook, despite significantly stepping up capital investments in order to drive long-term growth in our business.

«In the U.S., comparable sales growth excluding gasoline accelerated to 2.3 percent during the quarter, and was 2.6 percent excluding the net impact from a weather benefit last year. We were encouraged to see the two-year stacked comparable sales growth, adjusted for weather, also accelerated to 5.0 percent in the fourth quarter versus 4.5 percent in the third quarter of 2019. Our online sales growth in the U.S. accelerated to 42.7 percent at constant exchange rates in the fourth quarter, and we met our 2019 guidance outlook of over 20 percent growth, building upon our position as the leading omnichannel operator on the East Coast. Performance at Food Lion and Hannaford was particularly strong. While Stop + Shop’s comparable sales excluding gasoline improved over the last quarter, they remained slightly negative due to a challenging sales environment. That said, our ‘Re-imagine Stop + Shop’ program continues to build momentum with sales in Long Island, and now Hartford, performing in line with our expectations. In 2020, we expect to remodel another 65 Stop + Shop stores across the brand’s footprint.

«In the Netherlands, we saw strong comparable sales growth of 4.3 percent during the quarter. Market share at Albert Heijn was up significantly year over year in the fourth quarter, an improving trend over previous quarters. Net consumer online sales for the segment were up 27.5 percent. At bol.com, our online retail platform in the Benelux, net consumer sales grew by 28.7 percent. In Belgium, comparable sales excluding calendar impacts were up modestly, and we gained market share during the quarter. Our Central and Southeastern Europe segment saw 3.6 percent comparable sales growth excluding gasoline.

«We continue to make progress on the execution of our Leading Together strategy. We exceeded our guidance for our Save for Our Customers program in 2019, generating EUR 709 million in savings compared to our guidance of EUR 600 million. As a result, we have raised our goal to EUR 1.9 billion in cumulative savings through 2021, compared to our previous target of EUR 1.8 billion. We remain on track to reach our goal of doubling net consumer online sales to EUR 7 billion by 2021. As detailed in a separate press release, we have decided to discontinue our small U.S. Midwest online grocery sales operation, though we remain committed to extending our leading position in the larger East Coast omnichannel operation. We expect U.S. online sales growth to accelerate to 30 percent or more in 2020, with a total of nearly 1,000 click-and-collect points by the end of 2020, up from 692 in 2019.

«Although we will make significant investments in 2020 to drive long-term growth, we expect group underlying operating margin in 2020 to be broadly in line with 2019. We expect mid-single-digit growth in underlying EPS (earnings per share) in 2020.»