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Retail conglomerate Ahold posted its interim first-quarter results yesterday, which revealed a 1.0 percent sales increase to 8.7 billion euros (a rise of 3.4 percent at constant exchange rates), which the company attributed to a positive effect of business acquisitions during the quarter; operating income growth of 3.3 percent to 409 million euros; and a 45.7 percent surge in net income to 274 million euros.
“Our repositioning actions in recent years and our customer focus have enabled us to increase volumes and improve market share in the Netherlands and the United States, and deliver another quarter of solid performance,” noted John Rishton, CEO of Amsterdam-based Ahold. “The market continues to be challenging, with customers focused on value and high levels of promotional activity. Despite these conditions, we remain confident in our ability to balance sales and margins and to continue providing value to our customers.”
Ahold USA net sales were $ 7.1 billion, an increase of 4.2 percent, partly because of business acquisitions, namely the $99 million purchase of Ukrop’s stores. Identical sales were up 1.7 percent (down 0.1 percent excluding gasoline). Operating income was $295 million, or 4.2 percent of net sales, a decline of $ 18 million. Price investments and higher operating costs related to acquisitions and reorganization negatively affected the operating margin, among them losses in the quarter of $12 million in connection with the newly acquired Ukrop’s stores, which included conversion costs; a $12 million charge resulting from the alignment of inventory valuation across the newly formed U.S. divisions; and $5 million in IT integration costs.