Aug 09, 2013
Delhaize’s Q2 Revenues Up
For its second quarter of 2013, Delhaize Group’s revenues edged up 0.6 percent and 1.7 percent at actual and identical exchange rates, respectively, while organic revenue grew 1.9 percent. In the United States, revenue in local currency grew 0.4 percent (excluding revenues from Sweetbay, Harveys and Reid’s, pending their planned divestiture), despite a 0.8 percent negative calendar impact. Excluding the impact from 11 store closures in early 2013, revenues in local currency increased 0.8 percent.
U.S. comparable-store sales growth was 1.1 percent (0.3 percent, including the 0.8 percent negative calendar effect). Delhaize America continued to see low retail inflation, leading to positive volume growth at both Food Lion and Hannaford.
Gross margin for Delhaize Group was 24.3 percent of revenues, rising 16 basis points at identical exchange rates. Price investments across the company were more than offset by Bottom Dollar Food’s improved results and less shrink at Delhaize America.
In the first half of 2013, Delhaize Group’s revenues increased 1.4 percent and 2 percent at actual and identical exchange rates, respectively. Organic revenue rose 3 percent. In the United States, revenue in local currency grew 1.3 percent (excluding Sweetbay, Harveys and Reid’s revenues, as above), including a 0.2 percent positive calendar impact. Excluding the impact from store closures in 2012 and 2013, revenues in local currency went up 2.4 percent. U.S. comps growth was 1.5 percent (1.7 percent, including the 0.2 percent positive calendar effect).
Delhaize Group’s gross margin was 24.4 percent of revenues, increasing 10 basis points at identical exchange rates.
For the first six months of 2013, underlying operating profit of Delhaize’s U.S. operations increased 8.8 percent to $342 million, and the underlying operating margin was 4.1percent, up from 3.8 percent in the year-ago period.
“Our group has delivered solid results for the second quarter,” said president and CEO Pierre-Olivier Beckers, attributing a significant part of that success to the company’s American operations. “In the U.S., we experienced our third consecutive quarter of positive volume growth. At Food Lion, 178 additional stores were repositioned as part of Phase 4 [of the company’s brand strategy implementation], bringing the total of repositioned stores to almost 80 percent of the network. At Hannaford, we have implemented our targeted price investments during the second quarter.”
Phase 5 of the company’s brand strategy implementation, planned for the fourth quarter of 2013, will complete the initiative.
Beckers added that the decision to divest Sweetbay, Harveys and Reid’s was “[i]n line with our commitment to focusing on areas where we will be able to generate the highest growth and returns.” The deal to sell Jacksonville, Fla.-based Bi-Lo Holdings 72 Sweetbay stores, 72 Harveys stores, 11 Reid’s stores and the leases of 10 previous Sweetbay locations is expected to close during the fourth quarter.
Beckers expressed the company’s confidence that “we will be able to generate an underlying operating profit for 2013 of at least 755 million euros [US $1 billion], an improvement compared to our previous guidance.”
Delhaize Group is a Brussels-based international food retailer present in 10 countries, with a total of 3,455 stores.
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