Ahold Lifted by Dollar Strength

By Archie Van Riemsdijk 

AMSTERDAM--Dutch Food retailer Royal Ahold NV said Wednesday that first-quarter net profit jumped, recovering from a large settlement the company had to pay a year earlier and on revenue gains driven by the stronger U.S. dollar.

The company didn't comment on its preliminary merger talks with Belgian food retailer Delhaize, which could create the third-largest grocer in the U.S. behind Wal-Mart Stores Inc. and Kroger Co.

"We are encouraged by the positive momentum in our sales trend," said Chief Executive Dick Boer, "despite the adverse timing of Easter." He said the roll-out of more stores in the U.S. increased the company's volume market share.

First-quarter net profit was EUR213 million ($232 million), compared with EUR50 million a year earlier. Early last year, Ahold set aside a large provision to settle a class-action lawsuit related to improper accounting practices at its former subsidiary, U.S. Foodservice.

Underlying operating income was 0.5% lower at EUR390 million, compared with EUR392 million a year earlier.

Revenue was up 15%, driven by a stronger U.S. dollar. Excluding the large currency impact, opening of new stores and volatile gasoline sales, identical sales remained subdued in the U.S. at 0.1%. Ahold earns two-thirds of its revenue in the U.S., through its supermarket chains Stop & Shop and Giant. In its home market in the Netherlands, identical sales growth was 2.5%.

Write to Archie Van Riemsdijk at [e-mail]

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