UPDATE 2-Ahold sees U.S. stores picking up in H2

(Rewrites, updates share prices)

By Foo Yun Chee

AMSTERDAM, April 23 (Reuters) - Dutch supermarket group Ahold (AHLN.AS) said it expects margins at its U.S. stores to improve later this year, helped by a revamp, but is wary about the impact of an economic slowdown and rising food prices. Ahold, the world's seventh largest retailer by sales, started a two-year overhaul of its U.S. supermarkets in 2006 that has hurt margins. The stores generate just over half of its annual sales.

"We expect an improvement in the U.S. operations in the later part of the year," Chief Executive John Rishton said on Wednesday at the annual shareholders meeting.

"Margins remain down from where you and I would like them as a consequence of the repositioning," he said.

He said the company was on track to achieve its 2008 target for an underlying retail operating margin of 4.5 to 5 percent this year, compared to 4.6 percent in 2007.

The group is keeping a close eye on current economic uncertainties that may crimp consumer spending, said Rishton. "We will remain vigilant on the changing economic situation and rising food prices," he said.

Last week, U.S. rival Supervalu Inc (SVU.N) reported flat sales at stores open at least four quarters as consumers continue to cut back in a weak economy and opted for cheaper products.

Ahold shares ended 1 percent down at 9.53 euros on Wednesday, underperforming a 0.33 percent rise in the DJ Stoxx European retailers' index .SXRP.

Ahold expects to sell its 49 percent stake in Portugal's Jeronimo Martins Retail (JMR) this year, Rishton said. It first announced plans to dispose of the stake after a strategic review in 2006.

"We are confident we will sell JMR Holdings this year," he said.

Earlier on Wednesday, Ahold said it had agreed to sell its 73 percent stake in Dutch grocery chain Schuitema SUTN.AS to British private equity firm CVC Capital Partners [CVC.UL] for 185 million euros ($293 million) in cash, real estate and 58 Schuitema stores.

Ahold has no plans to sell its 60-percent owned Scandinavian joint venture ICA, Rishton said.

"It will continue to be part of Ahold now and in the future," he said.

On Ahold's portfolio of properties which it has said has a market value of 5.6 billion euros, Rishton said: "I would prefer to increase our properties. Ownership of properties is a strategic asset. We do not own sufficient properties."

(Reporting by Foo Yun Chee; Editing by Richard Hubbard)