Ahold 2Q Rev. EU 7.42B; Analyst Est. EU7.5B

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Aug. 21 (Bloomberg) –- Bloomberg’s Caroline Hyde reports earnings for Dutch retailer Ahold which missed estimates on both sales and profit. She speaks to Manus Cranny and Mark Barton on “Countdown.” (Source: Bloomberg)

Caroline has been going over the numbers.

A miss in sales and profit.

Sales fell more than 1% but 4% if you're taking into account the changes in foreign currency.

That was the miss underlying operating profit down 15%. this is a company that is huge not only in the netherlands but the u.s. and they have stop & shop and giant food.

They are bigger in the u.s. than they are in europe.

I'm a 60% of sales comes from the u.s. in the netherlands you have brands and europe is about 40% of their sales.

This is likely to be a tough quarter.

We had the late timing of easter which is why the company is winning the slowdown in sales but a challenging competitive environment.

The chief executive has warned about this and the analysts have said we are expecting profitability to be under pressure.

We are expecting sales to be under pressure.

In the u.s., like for like sales fell more than expected, down 1.8%. they look -- market share in new england.

They are looking at potentially bidding for that chain, $3.5 billion value.

They're investing and trying to improve the in permit to shop in.

We have price inflation under pressure and they are swallowing this.

We will bear the brunt of reducing commodity prices and that will [indiscernible] profitability.

They are putting money into the internet.

Online is the area of growth.

18 -- 18% sales are 19%, they have been investing and they want half a million houses to be serviced by one of their brands.

They are trying to push that out and they're looking more optimistic for the outlook which investors and analysts might be impressed about.

They are still investing and they have all these terms, it is called simplicity in these areas of focus of change but they say ongoing investments in the u.s. they want to slow the pain and want to start winning out against their competitors but if you have slowing inflation -- you cannot raise prices.

If you are that is eating into your profitability.

The u.s. underlying margin is at 7% and the netherlands at 5%. they're holding onto margins.

We are seeing [indiscernible] margins are coming under pressure.

Analysts have braced themselves and it is where the market had expected them.

There is handwringing and grabbing of hair and screaming at people's desks, this is not that bad.

Many people have raised themselves but it is not a pretty picture.

Lex we will see how they deliver.

Thanks for that round.

This text has been automatically generated. It may not be 100% accurate.


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