Resilient US helps Ahold Delhaize top profit forecast, but CEO change knocks shares
Ahold Delhaize’s Q1 Results and CEO Transition Impact
By Dimitri Rhodes and Jerome Terroy
Strong U.S. Performance Drives Profit Beat
May 6 (Reuters) - Supermarket group Ahold Delhaize on Wednesday reported first-quarter core profit above market expectations, citing resilience of its U.S. business, but news of an upcoming CEO change weighed on the shares.
Leadership Change Announced
The Dutch group, which runs the Albert Heijn and Delhaize chains in the Netherlands and Belgium, said after the results publication that it had chosen Kingfisher CEO Thierry Garnier to succeed chief executive Frans Muller, who is set to retire in April 2027 after nine years at the helm.
Market Reaction to CEO Departure
Ahold Delhaize's shares fell 3.4% by 0836 GMT. Analyst Michiel Declercq from KBC Securities said Muller's departure was the main drag on the stock, as he was "well liked by the investor community, had a strong track record and did an excellent job integrating the Ahold and Delhaize merger" of 2016.
Financial Highlights and U.S. Market Dynamics
The operator of U.S. chains Stop & Shop, Giant, Food Lion and Hannaford reported a marginal rise in its underlying quarterly operating income to 896 million euros ($1.05 billion), which beat analysts' consensus of 858 million euros.
Excluding a hit from the weak U.S. dollar, the core earnings rose 8.1% compared to last year, as the U.S. business remained strong despite falling consumer confidence.
Ahold Delhaize, which generates more than half of its revenue in the U.S., joined many other European firms in flagging a hit from currency effects.
Consumer Sentiment and Economic Pressures
U.S. consumer sentiment also dropped to an all-time low in April, as inflation caused by the U.S.-Israeli war with Iran continued to weigh on households.
"Consumers are under pressure, and that impacts the market and in the end also impacts ... our sales," finance chief Jolanda Poots-Bijl told Reuters.
Global Events Affecting Costs
The war has disrupted shipping in the Strait of Hormuz, driving up oil prices and ultimately the cost of gasoline and diesel. Prices for other commodities, including fertilizers, petrochemicals and aluminium, have also surged and are expected to impact consumers soon.
"These impacts play out often with a delay in our industry, and could impact us somewhat mid- to longer term," Poots-Bijl added.
Exchange Rate Information and Reporting Credits
($1 = 0.8524 euros)
(Reporting by Dimitri Rhodes and Jerome Terroy in Gdansk, editing by Milla Nissi-Prussak)
