UPDATE 1-Ahold cautious on year end after profit shortfall
* Q3 operating profit 289 mln vs 316 mln expected
* Says remains cautious about outlook
* Sales growth in United States turns negative (Adds details, background)
BRUSSELS, Nov 15 (Reuters) - Dutch supermarket chain Ahold posted weaker-than-expected operating results, due to a difficult market environment in the United States and higher costs in the Netherlands, the group said on Thursday.
The group said it remained cautious about the rest of the year and expected market conditions to continue to be difficult.
Operating profit in the third quarter fell 3.7 percent to 289 million euros ($367.9 million), below the 316 million expected in a Reuters poll of nine analysts.
Adjusted for the opening and closing of stores, sales in the United States, where the group makes most of its revenues, fell 1.5 percent excluding fuel, a significant slowdown from the 2.2 percent growth recorded in the second quarter.
This was due to high promotional activity, which did result in market share gains, lower retail price inflation and lower sales in in-store pharmacies, where it sold more generic medicines instead of higher-priced brand name drugs.
Another cause for this slowdown were the strong sales in the same period last year, when customers stocked up ahead of the arrival of Hurricane Irene.
Belgian peer Delhaize, which also has a large presence in the United States, said earlier in November that retail inflation turned into deflation in the quarter.
Ahold's operating margins in the United States, where it runs the Stop & Shop, Giant-Landover and Giant-Carlisle chains, decreased to 4.0 percent from 4.2 percent last year.
In the Netherlands, same-store sales grew 2.5 percent, caused by successful promotional campaigns at its Albert Heijn stores.
Margins fell to 5.6 percent from 6.4 percent last year, as it paid higher wages to its staff and incurred costs for integrating the Jumbo supermarkets it bought.
Overall, the group's net result fell 45.9 percent to 139 million euros, caused by its 90 million euro share of a tax charge at Swedish supermarket ICA in which it owns a 60 percent stake.
Ahold said in September that is was considering the sale of its stake in ICA, in a deal analysts say could yield over 2 billion euros.
It gave no further update on the sales process on Thursday. ($1 = 0.7856 euros) (Reporting By Robert-Jan Bartunek; editing by Philip Blenkinsop)
- Alabama man gets $1,000 in police settlement, his lawyers get $459,000
- Probe: Athletes took fake classes at University of North Carolina
- Canada's Harper vows tighter security after Parliament attack |
- Some U.S. hospitals weigh withholding care to Ebola patients
- Man arrested after jumping White House fence, causing lockdown