Delhaize Group has announced its first quarter results for 2012, with overall revenue growing 5.9 per cent on a year-on-year basis to €5.48bn, pushed up by price increases.
While comparable store sales evolution stood at -0.6 per cent in the US and -0.9 per cent in the group's home market of Belgium, there was double-digit revenue growth in Southeastern Europe and Asia.
However, the company recorded a first-quarter net loss of €10m for the quarter, compared with a net profit of €126m a year earlier, impacted by the closing of 126 stores in the US during the quarter which led to €167m in charges.
'In the first quarter we continued to deliver on our New Game Plan by investing in key revenue growth initiatives. These actions resulted in solid revenue growth of 5.9 per cent,' said president and CEO Pierre-Olivier Beckers. 'Our commitment to price competitiveness, the accelerated revenue momentum in our Food Lion Phase One stores, strong revenue growth at Bottom Dollar Food, real growth in Serbia and the strength of our Alfa Beta brand, give us confidence that our strategy is delivering the intended results.
'These actions and the current trading environment translated into lower underlying operating profit in the first quarter of 2012,' he explained. 'In order to fund our long-term growth initiatives and to further invest in our prices in several of our markets, particularly the U.S. and Belgium, we will increase our focus on the generation of free cash flow through a more disciplined approach to capital expenditures and improvements in working capital. In 2012, we have set as a target the generation of €500m in free cash flow. We are also more determined than ever to exceed our €500m gross annual cost savings target by the end of this year. I am convinced that these decisions will strengthen the long-term health of our business.'
