* Takes 150 mln euros impairment on Serbia
* U.S. comparable sales +3.3 pct vs +2.5 pct expected
* Belgian comparable sales -1.2 pct vs -0.6 pct expected
* Shares biggest gainers in European retail index
(Adds details on U.S. business, analyst comment, share reactio)
BRUSSELS, Aug 7 Belgian supermarket group
Delhaize reported a better-than-expected sales
performance in the United States, outweighing a weak second
quarter in its home market and Serbia.
Delhaize's U.S. business has seen a reversal of fortunes in
recent quarters, as a project to overhaul Food Lion, its largest
supermarket chain, starts to show results.
Same-store sales in the United States, where the group
makes about 60 percent of its sales, rose 3.3 percent, ahead of
the average 2.5 percent growth expected in a Reuters poll of
The group's shares rose as much as 5 percent on Thursday,
making them the strongest performer on the STOXX 600 European
Retail Index. Delhaize has outperformed this index by a
quarter since the start of 2014.
"A few years ago we said 'the United States is their biggest
business and is underperforming' now it's the other way round,"
said Petercam analyst Fernand de Boer.
Delhaize, which also operates Hannaford supermarkets in the
United States, said that U.S. profit margins should be flat for
the whole of 2014, after falling slightly in the second quarter.
Delhaize said it has noticed more promotional activity by
Kroger, the largest supermarket chain in the United
States which acquired the Harris Teeter chain in the north-east,
but had no immediate plans to respond.
"We are convinced that we are still cheaper," Chief
Executive Frans Muller told a conference call after the results.
For the company as a whole, operating profit, adjusted for
non-recurring items, fell 11 percent in the second quarter to
178 million euros ($238.24 million), above the 169 million
expected in a Reuters poll of five analysts.
Delhaize repeated its 2014 outlook for capital expenses of
625 million and a target of 180 new store openings.
TOUGH TRADING IN BELGIUM, SERBIA
In Belgium, where Delhaize competes with Ahold,
Colruyt, Carrefour and German hard
discounters Aldi and Lidl, comparable sales fell 1.2 percent and
the company lost market share.
A Reuters poll had expected sales in the country to fall 0.6
In June the group said it would cut 2,500 jobs in its
Belgian business, which prompted industrial action towards the
end of the second quarter and hit the sales performance.
The company said it would resume talks with trade unions
over how to implement the restructuring of its Belgian business
Delhaize said it took another 150 million euro impairment on
its Serbian operations, as sales continued to decline and
economic sentiment remained weak.
Delhaize bought Serbian retailer Delta Maxi, with operations
across the Balkans, in 2011 for 932 million euros and has since
then made a string of divestments and steadily written down the
value of the unit.
Delhaize said that after the impairment, it still had some
120 million euros of goodwill and trade names on its books
related to the Serbian acquisition.
"It's been a failed acquisition, but it was done at a time
when the market was still much better so you can't blame them,"
Petercam's de Boer said.
($1 = 0.7472 Euros)
(Reporting by Robert-Jan Bartunek; Editing by Erica Billingham)