International grocery group Ahold has reported that its US chains Stop & Shop and Giant-Landover delivered their best like-for-like performance “in many years” during the first quarter.
However, net income fell 25 per cent because of a provision relating to former subsidiaries Bi-Lo and Bruno’s, which filed for Chapter 11 in the period.
Ahold posted net income of €196m (£170.6m), after a €66m (£57.4m) provision for lease guarantees on the two fascias. Group sales rose 15.2 per cent to €8.7bn (£7.6bn) and income from continuing operations was up 14.5 per cent to €253m (£220.2m).
Excluding fuel, Stop & Shop and Giant-Landover achieved like-for-like sales growth of 3.1 per cent and 3.6 per cent respectively. In Europe, Ahold said its Albert Heijn stores “continued to successfully balance sales, market share and margin”. Weak economic conditions and Slovakia’s introduction of the euro held back performance in central Europe.
Ahold chief executive John Rishton said: “We continued to make good progress with our strategy for profitable growth. We had strong sales and solid margins in the Netherlands and the US, despite the challenging economic environment.
“We are taking restructuring actions in the Czech Republic and Slovakia to build a firm foundation for the future.”
The changes to the latter businesses are expected to lead to charges later this year.
Bernstein analyst Chris Hogbin said Ahold’s first-quarter results were “slightly ahead of expectations” but that the outlook is “becoming more challenging”.