Royal Ahold Delhaize Shares Fall on Profit Drop, Consensus Miss
By Michael Susin and Ian Walker
Royal Ahold Delhaize shares fell in early trade after the company reported a third-quarter profit fall that missed consensus estimates, and despite announcing a new share buyback.
Shares of the Dutch grocer at 0857 GMT on Wednesday were down EUR2.24, or 7.8%, at EUR26.36.
Ahold's net profit for the quarter fell to 394 million euros ($421.6 million), compared with EUR589 million for the same period a year ago and a company-provided consensus estimate of EUR590 million.
The fall reflects a EUR153 million impairment charge related to FreshDirect in the U.S. which it has agreed to sell to Getir, and EUR61 million of restructuring cost related to the company's Belgium transformation and other initiatives.
It said that 51 Delhaize Belgium stores have now signed agreements with independent buyers and started transitioning the first stores to the new operators in October.
Ahold also said that it expects to book a pretax loss of between $275 million and $325 million in its accounts from the sale of FreshDirect which is expected to complete in the fourth quarter of this year.
Net sales came in at EUR21.93 billion compared with EUR22.41 billion and a consensus of EUR21.95 billion. Within this U.S. sales were up 0.5% at EUR13.625 billion, while European sales were 7.1% higher at EUR8.31 billion.
Ahold has also increased its free cash flow target for 2023 to a range of EUR2.2 billion to EUR2.4 billion form a previous range of between EUR2.0 billion and EUR2.2 billion.
Ahold Delhaize outlined a EUR1 billion share buyback program, scheduled to start at the beginning of 2024.
"Taking stock of what we have learned so far, we are currently refreshing our priorities to calibrate to the macro and competitive environment. This will require some shifts in focus," President and Chief Executive Officer Frans Muller said.
The company plans to hold a strategy day next May to present the board's plan for the next phase of growth and value creation.
Write to Michael Susin at michael.susin@wsj.com and Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
November 08, 2023 04:25 ET (09:25 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.-
How Anti-Obesity Drugs Are Innovating the Healthcare Market
-
What’s Happening In the Markets This Week
-
Why Immigration Has Boosted Job Gains and the Economy
-
What to Invest in During High Inflation
-
Never Mind Market Efficiency: Are the Markets Sensible?
-
Starbucks Stock Could Use a Pick-Me-Up After Big Selloff; Is it a Buy?
-
5 Cheap Stocks to Buy From an Attractive Part of the Market
-
Markets Brief: All Eyes On Inflation
-
After Earnings, Is Lyft Stock a Buy, a Sell, or Fairly Valued?
-
8 Stock Picks in the Apparel Industry
-
Baidu Earnings: Advertising Weakness Offset by Continued Growth In Cloud Business
-
Going Into Earnings, Is Target Stock a Buy, a Sell, or Fairly Valued?
-
Walmart Earnings: Low Prices and Strong Digital Presence Drive Market Share Gains
-
After Earnings and a Big Selloff, Is Shopify Stock a Buy, a Sell, or Fairly Valued?
-
Cisco Earnings: Positive Guidance and Splunk Inclusion Align With Our Long-Term Thesis
-
3 Warren Buffett Stocks to Buy After Berkshire Hathaway’s Just-Released 13F Filing