Ahold Delhaize Accelerates Comp Stack in Q2

Ahold Delhaize reported second-quarter financial results this week that officials said made good on its commitment to ride pandemic shopping trends to greater financial strength and omnichannel positioning.

The Dutch retail giant said sales in the period gained 3% worldwide and by 2.7% at constant exchange rates in the U.S., where same-store sales dipped only slightly—1.5%—lapping 20.6% comps from the year before. The 19.1% two-year comp stack accounting accelerated from the 15.8% two-year stack in 2019-2020 and the 18.1% two-year stack reported in the first quarter of this year. U.S. revenues totaled $13.4 billion; e-commerce sales jumped by 60% to $908 million, or by 27% excluding the acquisition of FreshDirect.

“While communities across our markets reopened during Q2, food-at-home demand remained very resilient,” CEO Frans Muller said in a statement. “Many of the habits formed by consumers during the COVID-19 pandemic in 2020 are proving sticky, aided by our initiatives to improve our omnichannel offerings for consumers. … The two-year comparable sales stack growth rates were strong in both of our regions, but particularly in the U.S.”

Food Lion once again led results among U.S. banners, officials said, with all of its U.S. brands except Stop & Shop gaining market share during the quarter. The latter banner, Ahold Delhaize’s largest in the U.S., had flat market share in the quarter, officials said. It is in the process of a multiyear rebranding and remodeling effort that has reached about 100 of its 400 stores.

Underlying operating margin in the U.S. was 5%, down 1.1 percentage points from the prior year at constant exchange rates as margins lapped the unusually high levels of the prior year. The figure, however, was elevated vs. pre-COVID levels due to strong sales leverage.

The company subsequently raised its underlying operating margin outlook to approximately 4.3% vs. a previous expectation of 4%, reflecting the strong margin performance over the first half of the year. The margin embeds balancing the effects of an ongoing cost savings program, with cost pressures related to COVID-19 as well as earnings dilution from increased online sales penetration.  The company also raised its earnings per share outlook for the fiscal year from a mid-teens to a high-teens range.