Nov. 17 (Bloomberg) -- Royal Ahold NV, the Dutch owner of Stop & Shop grocery stores, said third-quarter profit rose 15 percent as the company’s supermarkets gained market share and food prices jumped.
Net income rose to 257 million euros ($347 million) from 223 million euros a year earlier, the Amsterdam-based company said today. Profit had been expected to decline to 209 million euros, according to the average of eight analyst estimates compiled by Bloomberg. Sales increased 2.5 percent to 6.9 billion euros.
“This is an excellent performance,” said Richard Withagen, an Amsterdam-based analyst at SNS Securities, who has a “hold” rating on the stock. “In the U.S. they did much better than I expected.” So-called identical sales growth in the U.S. excluding gasoline was 4.5 percent in the third quarter. Withagen had forecast an identical sales increase of 2.1 percent. Identical sales exclude outlets open less than one year.
Ahold is looking to expand in adjacent markets and opened two stores in Belgium this year. The grocer plans to introduce its Albert Heijn To Go format in Germany in the second half of next year and will add shops in cities including Dusseldorf and Cologne, Chief Executive Officer Dick Boer, who took the helm in March, said earlier this year. Growth should not come only through acquisitions, Boer said on a conference call today.
U.S. Market Share
“In U.S. we have been able to grow market share in volume and in dollars,” the CEO said today. Shoppers are focusing on promotions and the company is continuing its 350 million-euro cost savings program to limit price increases, he said.
The shares rose 2.7 percent to 9.67 euros at 9:23 a.m. in Amsterdam trading. Ahold has fallen 2.1 percent this year, giving the company a market value of 10.8 billion euros. U.S. rival Supervalu Inc. has fallen 16 percent in the same period.
Ahold, whose Giant Carlisle chain in the U.S. competes with Wal-Mart Stores Inc., will present a strategy update on November 21.
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