Dutch supermarket group Ahold reported second-quarter operating profit above forecasts on Thursday, helped by cost controls even as the retail environment continues to reflect weak economic conditions. Second-quarter earnings before interest and taxes (EBIT) rose 25.5 percent to 295 million euros, compared with the 276 million euros projected by analysts and 235 million euros a year earlier.
Sales for the second quarter, reported in July, rose 11.5 percent but were well below forecasts. [ID:nLS243711] Ahold, which owns the Netherlands' biggest supermarket chain Albert Heijn but makes just over half of its sales in the United States, said it was able to extract profitability from operations despite the challenging economic environment.
We remain well positioned in an increasingly competitive environment to deliver our strategy for profitable growth and manage the balance between sales and margins, Chief Executive John Rishton said in a statement.
Net income fell 34.7 percent to 195 million euros in the second quarter from a year earlier, when accounting policies pushed up net income. Analysts had projected 184 million euros.
Ahold has been outpacing many of its rivals due to a deep restructuring that began well before the economic downturn, with a revamp of its stores and operations.
For the full year, analysts are expecting Ahold to post an operating profit of 1.3 billion euros on sales of 27.7 billion euros.
French supermarket group Casino also reported weaker sales, while Britain's Tesco has been holding up well in the tough retail environment.
Analysts say there are some signs of stability, and possible hints of a recovery ahead, but that the outlook still remains uncertain.
Ahold said it had a retail operating margin of 4.8 percent in the latest quarter, compared with its stated target of 5 percent.
(Reporting by Reed Stevenson; Editing by Jon Loades-Carter)