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Operational Improvements Drive Improved U.S. Sales at Ahold Delhaize

Legacy Ahold brands have regained promotional footing, while Food Lion saw a boost from Hurricane Florence, officials said
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Operational improvements at Ahold USA legacy brands, including Stop & Shop, contributed to a strong third quarter of sales and earnings growth at Ahold Delhaize, officials said.

The Dutch-based retailer said sales in the U.S. in the fiscal third quarter improved by 3.2% to $11.2 billion, with nonfuel comparable-store sales increasing by 3%. CFO Jeff Carr in a conference call said additional sales at Food Lion stores in the Carolinas related to Hurricane Florence accounted for about 0.5% of the comp gain. He cited “positive sales trends across all U.S. brands” as the Ahold brands Giant and Stop & Shop got a better handle on promotions after losing a step earlier this year as they adjusted to the company’s new decentralized structure.

The company said it totaled $215 million in U.S. online sales during the quarter, or 11.8% growth primarily through its Peapod service. That rate of growth, Carr said, is still less than the company would like, but represented a sequential improvement from the second quarter. U.S. online sales are up by 9.6% on the year.

Margins improved, along with sales, as synergy savings and improved promotional efficiency drove a 20 basis-point improvement to 4.1% underlying operating margin. U.S. inflation in the quarter was estimated at 1.6%, Carr said.

Officials said they would provide further details on its U.S. strategyincluding details of its new partnership with Takeoff Technologies to provide robotic warerooms at storesat an investor update planned next week in New York.

Companywide, sales of about $18.1 billion were up by 3.6% at constant exchange rates, boosted by 5.8% sales growth in the Netherlands, and 21.5% overall e-commerce sales growth led by its Dutch-based Bol.com division.

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