UPDATE 3-Ahold profit beats forecast on strong Dutch performance
* Underlying oper profit 338 mln euros vs 320 mln forecast
* Shares biggest gainers among European blue-chips
* Raises market share in Netherlands
* Q2 U.S. identical sales growth slows to 0.3 pct
By Robert-Jan Bartunek
BRUSSELS, Aug 22 (Reuters) - Dutch grocer Ahold beat forecasts for quarterly operating profit as cost cuts and market-share gains in the Netherlands offset a weak performance in the United States, its largest market.
Ahold also said on Thursday it would disclose what it planned to do with excess cash by the end of the year, raising the prospect of further payouts to shareholders or acquisitions.
Analysts estimate Ahold - which operates market leader Albert Heijn in the Netherlands and Stop&Shop and Giant stores in the United States - has about 2 billion euros ($2.7 billion) to spend.
Ahold's strong performance at home and the prospect of shareholder payouts lifted its shares more than 5 percent, making them the biggest gainers on the FTSEurofirst 300 Index of leading European stocks.
Second-quarter operating profit (EBIT) adjusted for one-off items rose by 13 percent in the Netherlands compared with a 5.2 percent fall in the United States.
Last week, the world's largest retailer Wal-Mart Stores Inc reported a surprise decline in quarterly same-store sales in the United States and cut its outlook for the full year.
Analysts highlighted a strong improvement in the underlying operating margin at Ahold's Dutch operations, which rose to 5.5 percent from 5.1 percent a year earlier.
That helped boost the group operating margin to 4.4 percent, compared with a peer median of 3.4 percent according to Thomson Reuters data.
Ahold said it made 91 million euros of savings in its global operations in the first half of the year and was on track to reach its target of 600 million euros between 2012 and 2014.
The company, which competes in the Netherlands with privately held groups such as Jumbo and Spar as well as German discounters Aldi and Lidl, said consumers were still buying less and choosing cheaper products.
A recent study by Dutch bank ING said that half of Dutch consumers were making savings on their daily shopping, with 85 percent paying close attention to promotions.
Ahold said it had responded to this trend by introducing a basic range of own-brand products in its Albert Heijn supermarkets.
The company said it has increased market share in the Netherlands from 33.7 percent in January but declined to give the latest figure.
Operating profit adjusted for one-off items rose by 4 percent in the second quarter to 338 million euros ahead of the 320 million forecast in a Reuters poll of eight analysts.
Sales excluding fuel at stores open for at least a year in the United States, which accounts for more than 60 percent of Ahold's revenue, rose by 0.3 percent. That was below a forecast 1.5 percent and the 1.9 percent rise in the first quarter.
Higher payroll taxes and more expensive fuel have hit middle- and lower-income spending, pointing to an uneven recovery of the world's largest economy.
Ahold said that it was focusing on initiatives such as own- brands to improve margins and create customer loyalty.
In the Netherlands 54 percent of the goods Ahold sells are already own-brands, whereas in the United States it is 37 percent.
"Margin-wise the private labels are contributing well and don't forget loyalty, if you're loyal to a certain product you're quick to come back," Chief Executive Dick Boer told a conference call.
Ahold shares trade at a discount to many of their peers on 12.8 times expected 2013 earnings, compared with 15.6 times for Carrefour and 14.8 times for Metro, but at a premium to Tesco on 10.9 times.
After selling its stake in Nordic retailer ICA for 20 billion Swedish crowns ($3.05 billion), Ahold in June quadrupled its share buyback programme to 2 billion euros.
It had 3.8 billion euros of cash and cash equivalents on its balance sheet at the end of the second quarter, with the current share buyback still to be fully carried out.
Petercam analyst Fernand De Boer estimated that gave the company about 2 billion euros to spend.
Ahold previously said it would strike a balance between returning the cash to shareholders and making acquisitions.