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The retailer is clearly one of the winners of the corona crisis. The lockdown and hoarding doubled the quarterly profit. For the full financial year, Ahold Delhaize increases its profit forecast to at least 20 percent.
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Sales growth of over 20 and 10 percent in Ahold Delhaize’s American and European supermarkets, respectively
. And online sales were up 78 percent – 127 percent in the United States and 64 percent in Europe. This is the positive side of Covid-19 and the lockdown that first made us hoard and then made us eat and drink more in our room.
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The parent group of Delhaize saw its turnover in the lockdown quarter (April-June) increase by 16 percent to 19.1 billion euros. More than a billion more than true the analysts assumed on average.
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Operating profit also exceeds the expectation of 640 million euros with a climb of 69 percent to 1 billion euros. Ditto for the profit margin ticking 5.3 percent versus the expected 3.6 percent, despite the 260 million euros in covid costs for safety equipment and the corona bonuses for the shop staff. Over the first six months of the year, the corona costs amount to EUR 330 million. Ahold Delhaize recruited 45,000 employees last quarter.
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Optimistic
After the strong quarter, CEO Frans Muller – who increased in April tried to dampen investors’ expectations – the outlook for 2020. He is aiming for profit growth of more than 20 percent and a free cash flow of at least 1.7 billion euros. The interim dividend goes up two thirds to 50 cents per share.
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The CEO sees online purchases grow by 55 percent this year. Not only supermarkets and convenience stores such as Proxy Delhaize are attracting more people, channels such as Bol.com are also in great demand. Covid-19 will help Ahold Delhaize double its e-commerce to 7 billion euros in 2020 a year ahead of schedule, says Muller.
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The retailer does not provide separate figures for Delhaize. In the first quarter, Delhaize performed weaker than its foreign sister chains. The corona crisis increased sales by 10 percent. People bought more in the supermarket, because the catering industry was closed. However, the costs associated with corona depressed Delhaize’s earnings growth. Operating profit grew by six percent.
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