Delhaize Group Sees Weak First-Half Earnings

Executives at Delhaize Group said yesterday they expect a series of initiatives in the U.S. to help boost earnings 6% to 8% in the second half of the year, despite a decline at the corporate level in the first quarter, ended March 30, and expectations for more of the same in the second quarter.

BRUSSELS, Belgium — Executives at Delhaize Group here said yesterday they expect a series of initiatives in the U.S. to help boost earnings 6% to 8% in the second half of the year, despite a decline at the corporate level in the first quarter, ended March 30, and expectations for more of the same in the second quarter. Wall Street showed its skepticism, however, with the stock falling about 8.6% yesterday after the company reported declines of 4.7% in net income and 4.5% in sales. In the U.S. segment, sales rose 5.1% to $4.6 billion, with comparable-store sales climbing 3.3%, excluding the impact of the shift in Easter, which fell earlier this year. Operating profits were up 0.2% to $241.2 million. Executives said they are optimistic about a second-half earnings turnaround for several reasons, including market renewals in four Food Lion operating areas; increasing private-label sales; customer-segmentation initiatives; potential savings from distribution efficiencies; and an aggressive store opening and remodeling program.