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HomeMarketSupermarket operator Ahold hikes 2022 earnings outlook again By Reuters

Supermarket operator Ahold hikes 2022 earnings outlook again By Reuters

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By Diana Mandia

(Reuters) -Ahold Delhaize on Wednesday reported third quarter earnings that beat analyst estimates and raised its full year earnings forecast for the third time this year, citing strong U.S. sales and margins.

Ahold, which operates in the U.S. and Europe and has 19 brands including Stop & Shop, Giant, Food Lion and Hannaford, reported a 9.1% increase in group sales to 22.4 billion euros ($22.6 billion) for the third quarter, and an 9.7% increase in underlying operating income to 993 million euros.

Analysts had seen underlying operating income at 885 million euros.

The company said it now expects underlying per share earnings to rise by “double digits” in 2022. It had started the year forecasting EPS to fall as the COVID-19 pandemic waned but in August reversed that to expect a mid-single digit percentage rise.

“We’ve seen sequential improvement in comparable sales and profitability,” CFO Natalie Knight said in an interview. She said the group has won market share on both continents.

“The other piece … is that interest rates and foreign exchange are playing our way.”

The group, which is working with suppliers to mitigate cost increases and expanding its own-brand offers, also announced a new 1 billion euros share buy-back program to start at the beginning of 2023.

“Ahold Delhaize is enjoying very resilient sales volumes in the US,” wrote Bryan Garnier analyst Clement Genelot in a note.

“With this third guidance upgrade in a row and the 1 billion share buy-back announcement Ahold Delhaize …confirms its ‘defensive’ status.”

Its shares rose 2.4% to 29.39 euros at 0805 GMT in Amsterdam.

($1 = 0.9933 euros)

Story Credit: investing.com

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