On August 7th Ahold-Delhaize, with supermarket operations in the E.U. and the U.S. reported on Q2, FY 2024 ending June 30th. Assuming current currency conversion of $1.09 to €1 the Group attained a net income of $544 million on net sales of $24,361 million with a diluted EPS of $0.58. Corresponding figures for Q2, FY2023 comprised a net income of $510 million on net sales of $24,072 million. The Group achieved an operating margin of 3.5 percent compared to 3.3 percent for the corresponding Q2, FY 2023.
The U.S. segment attained net sales of $15,933 million, including online sales of $1,107 million. The U.S. operations achieved an operating income of $669 million compared to $626 million in Q2, FY 2023. Operating margin was 4.2 percent, up from 3.9 percent during Q2, FY 2023. Comparable sales declined by -0.5 percent, excluding gasoline, compared to 3.6 percent for Q2 FY 2023.
Ahold-Delhaize posted total assets of $55,261 million against long-term debt and lease obligations of $18,168 million. The company operates 2,048 stores in the U.S. under the Food Lion, Stop & Shop, Hannaford, Giant and Pea Pod banners. The E.U. operations comprise 5,548 stores including 1,144 specialty units.
The company provided FY 2024 guidance of a 4.0 percent minimum operating margin and low double-digit growth compared to FY 2023 with cash flow of $2.51 and a global allocation of $2.4 billion for capital expenditures.
In commenting on results, Frans Muller, President and CEO, stated, "I am pleased to report a second quarter performance that places us well on track to achieve our strategic aspirations and financial goals for 2024. It has been a busy quarter, as we launched our refreshed company strategy, 'Growing Together,' internally and externally. We believe we have a very compelling set of ambitions, which, on delivery, will yield strong growth for our company and our stakeholders.”
He added, “As inflation moderated and promotional opportunities increased, supported by vendors, our brands continued to deliver great value to customers, leveraging their loyalty programs and broad assortment of national and own-brand products, and offering a seamless shopping experience both online and in-store.”
Referring to the U.S. Segment Muller stated, “ Net sales declined by 1.5% at constant rates, while comparable sales growth excluding gasoline declined by 0.4%, negatively impacted by 1.2 percentage points from calendar shifts. Therefore, excluding the impacts of calendar shifts and the divestment of FreshDirect, we saw a sequential improvement in growth rates during the quarter, as volume trends continued on a positive trajectory. By putting increased attention on the value of own-brand products while making it easier to earn loyalty rewards
“During our Strategy Day in May, we communicated that we would take decisive and deliberate actions to ensure a stable and thriving future for Stop & Shop. We’re moving forward confidently in three key areas. First, improvements to the customer value proposition. Second, improving the cost structure. And third, optimizing the store portfolio. Regarding the latter, Stop & Shop will close 32 underperforming stores by year end. We expect to recognize a net impact to sales, in 2024, of between $100 and $125 million and, in 2025, between $550 and $575 million. We also expect to recognize a non-recurring pre-tax charge of between $160 and $210 million in Q3 2024. By creating a healthy store base, the team at Stop & Shop will be able to focus attention on the markets that are most important, including those where the brand has strong density, holds a strong market position.”
Muller concluded, “With positive momentum going into the second half of the year, I am confident that we are more than well on track to achieve our commitments for 2024. The stronger-than-planned performance in the first half of 2024 provides opportunities to already take some further actions in support of our Growing Together strategy and financial long-term ambitions in the second half of 2024, in particular, initiatives such as those we have just announced at Stop & Shop as well as other price investments we outlined in our new strategy.”