Ahold Delhaize Reports Solid Q1 Growth and Maintains 2025 Outlook
Ahold Delhaize has announced impressive net sales of €23.28 billion (approximately $26.41 billion) for the first quarter of fiscal 2025, marking a growth of 5% at constant exchange rates and a substantial 7.1% increase when measured at actual exchange rates. This remarkable performance underscores the company’s strategic initiatives that continue to pay off.
Key Drivers of Growth
The surge in sales can primarily be attributed to the recent acquisition of Profi, which has expanded Ahold Delhaize’s reach significantly within the CSE region through the addition of over 1,700 supermarkets and convenience stores. Additionally, there has been a 3.3% boost in comparable sales—exclusive of gasoline—alongside a flurry of new store openings that continue to enhance their market presence.
Digital Dominance
Online sales have also seen a notable boost, rising by 13.7% at constant exchange rates during the first quarter. This growth is primarily driven by the booming demand for online grocery shopping in both the US and European markets, complemented by the strong performance of bol.com, a prominent online retail platform under Ahold Delhaize.
Regional Performance Breakdowns
In the US market, sales advanced by 1.8% at constant exchange rates, achieving €13.9 billion. Meanwhile, European net sales showed equally strong growth, reflecting an increase of 10.1% at constant and actual exchange rates, ultimately reaching €9.3 billion.
Financial Insights
The company’s underlying operating margin stood at 3.8%, reflecting a slight 0.2 percentage point contraction at constant exchange rates due to strategic pricing investments made in the US. Ahold Delhaize reported an IFRS operating income of €880 million, maintaining its IFRS operating margin at 3.8%. Diluted earnings per share (EPS) also saw an 11.5% year-on-year increase, reaching €0.60 at actual currency rates.
Outlook Amid Challenges
Despite facing uncertainties in the macroeconomic landscape—particularly around tariff policies and currency fluctuations—Ahold Delhaize has reaffirmed its robust full-year outlook for 2025. The company projects an underlying operating margin of around 4% and anticipates mid to high-single-digit growth in underlying EPS.
A significant contributor to this forecast is the finalized acquisition of Profi, expected to yield an impressive €3 billion in net sales. However, the strategic closure of underperforming Stop & Shop stores may result in a revenue decrease of approximately $550 million to $575 million for 2025.
Additionally, the decision to cease tobacco sales is anticipated to impact Albert Heijn’s franchised store net sales in the first half of the year and is expected to negatively affect comparable store sales across Europe by one percentage point over the course of 2025.
Moving Forward
Jolanda Poots-Bijl, the CFO of Ahold Delhaize, conveys a sentiment of confidence: “With our strong market positions, our financial strength and the foundational work we’ve implemented over the last few years, I am optimistic that we are well-positioned to deliver on our ‘Growing Together’ plans. We will maintain our focus on making the right long-term decisions for the success and health of our business.”
As Ahold Delhaize navigates the complexities of the retail landscape, their strategic growth initiatives and a keen focus on adapting to consumer behavior will likely keep them ahead of the competition.
Stay tuned to the Extreme Investor Network for ongoing insights and in-depth analysis of evolving market trends that matter to investors like you!