Retail giant Ahold Delhaize on Wednesday reported declining profits for the third quarter of 2023, a downward trend driven by the company’s franchising operation of Delhaize stores in Belgium.
Ahold Delhaize’s net profit for the third quarter was €394 million – a 33% decrease compared to the same period in 2022. As well as complications arising in Belgium over the hotly-contested franchise plans, this decline was significantly influenced by a €153 million impairment related to the resale of New York online supermarket, FreshDirect, sold to Turkish home delivery firm Getir.
The transformation of Delhaize in Belgium created financial pressure as all the 128 stores directly managed by the company are restructured, with costs totalling €61 million. The Belgian transformation had a “net negative impact” on the group’s third-quarter sales, reducing them by approximately 0.2%, according to Ahold Delhaize. To date, 51 of the 128 integrated Delhaize stores have found independent buyers, says the group.
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In the third quarter, Ahold Delhaize’s revenues were €21.93 billion – a decrease of 2.1%. Although the group raised its cash flow (free cash flow) forecast to €2.2 to €2.4 billion (+ €200 million for both), the underlying profit per share for 2023 is forecasted to be “slightly below” 2022 levels.
Investors responded negatively to the reported outcomes. Ahold Delhaize’s share prices dropped by over 6% on Wednesday morning at the Amsterdam Stock Exchange.
