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Introduction & Market Context
Ahold Delhaize (OTC:ADRNY) presented its Q1 2025 financial results on May 7, 2025, revealing accelerated growth compared to previous quarters. The Dutch-Belgian retail giant reported net sales of €23.3 billion, representing a 5.0% increase at constant exchange rates and a 7.1% rise at actual rates. This performance marks a significant improvement from the modest growth seen in Q4 2024, when the company reported just a 0.6% increase in quarterly sales.
The results come as Ahold Delhaize continues to navigate a competitive retail landscape while integrating its recent Profi acquisition in Romania. The company’s stock closed at €36.64 on May 6, near its 52-week high, suggesting positive market sentiment ahead of the earnings release.
Quarterly Performance Highlights
Ahold Delhaize delivered solid comparable sales growth of 3.3% excluding gasoline, with Europe outperforming the U.S. at 3.7% versus 3.1%. The company’s online sales showed particular strength, increasing by 13.7% at constant exchange rates to reach €2.5 billion.
As shown in the following comprehensive financial summary:
The underlying operating margin stood at 3.8%, representing a slight decrease of 0.2 percentage points at constant exchange rates compared to the previous year. Diluted underlying earnings per share reached €0.62, up 4.6% at actual rates, demonstrating the company’s ability to grow profitability despite margin pressures.
On an IFRS-reported basis, the results showed even stronger growth in some metrics:
President and CEO Frans Muller emphasized the company’s growth model, which focuses on investing in customer value propositions, densifying markets, driving innovation, and leveraging the cost base to fuel further growth.
Regional Performance Analysis
Ahold Delhaize’s U.S. operations, which include brands such as Food Lion, Stop & Shop, Giant, and Hannaford, generated net sales of €13.9 billion, up 1.8% at constant rates. The U.S. segment achieved positive volumes for the second consecutive quarter, though its underlying operating margin decreased by 0.3 percentage points to 4.4%.
The company highlighted several achievements in its U.S. business:
Food Lion continued to be a standout performer in the U.S. portfolio, achieving an impressive milestone of 50 consecutive quarters of comparable store sales growth. The brand also saw nearly 40% growth in online sales and announced plans to remodel 152 stores in the Charlotte market.
Meanwhile, the European and Indonesian (EU&I) operations showed even stronger performance, with net sales increasing by 10.1% at constant rates to €9.3 billion. The EU&I segment improved its underlying operating margin by 0.3 percentage points to 3.4%, driven by strong results in the Benelux region.
The quarter marked the first with Profi in Ahold Delhaize’s portfolio, adding over 1,700 stores to the company’s European footprint. Profi contributed €647 million in sales during the quarter and is expected to add approximately €3 billion to Ahold Delhaize’s sales throughout 2025.
Strategic Initiatives
Ahold Delhaize continued to advance several strategic initiatives during the quarter. The company made progress toward its 80% omnichannel loyalty sales penetration ambition, reporting a 7 percentage point increase in loyalty sales and over 1 percentage point increase in own-brand penetration.
Price competitiveness remained a focus area, with Giant Food lowering prices on hundreds of own-brand products and Stop & Shop rolling out lower prices across thousands of products in over 40% of its stores.
The company also highlighted its sustainability efforts, including its EU brands aiming for 50% plant-based food sales by 2030 and the successful pricing of its third Sustainability-Linked Bond. Notably, the Carbon Disclosure Project upgraded Ahold Delhaize’s climate rating to A minus.
Financial Position & Cash Flow
Ahold Delhaize’s free cash flow for Q1 2025 was €199 million, down from €376 million in Q1 2024. The company explained this decline through a detailed cash flow bridge:
The reduction was primarily attributed to cycling the divestment of two meat facilities in the U.S. during the previous year, as well as changes in working capital, increased net investments, and higher lease repayments.
Despite the quarterly decline in free cash flow, Ahold Delhaize maintained its full-year target of at least €2.2 billion, suggesting confidence in cash generation improvement in upcoming quarters.
2025 Outlook & Guidance
Ahold Delhaize reaffirmed its full-year 2025 outlook across all key metrics:
The company expects to maintain an underlying operating margin of around 4.0% while delivering mid-to-high-single digit growth in underlying earnings per share. The €1 billion share buyback program announced in previous communications was confirmed, underscoring management’s confidence in the company’s financial strength and future prospects.
Chief Financial Officer Jolanda Poots-Bijl emphasized that the company remains on track to meet its full-year targets despite the slight margin pressure in Q1. The company’s capital expenditure plan of around €2.7 billion reflects ongoing investments in store remodels, digital capabilities, and supply chain optimization.
With its strong start to 2025, accelerating online growth, and the successful integration of Profi, Ahold Delhaize appears well-positioned to deliver on its full-year commitments while continuing to strengthen its competitive position across its key markets.
Full presentation:
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