Ahold Delhaize launches €1bn share buyback as Covid-19 boosts sales
Supermarket giant Ahold Dehlaize today said it will launch a €1bn (£896m) share buyback as it posted a rise in revenue for the third quarter.
The retailer, which operates grocery chains across the US and Europe, said the buyback will begin at the beginning of 2021 and marked the strength in its business model.
It came as Ahold posted a 6.8 per cent rise in revenue to €17.8bn in the three months to the end of September.
This was driven by growth in comparative store sales excluding fuel, which were up 12.4 per cent and 7.5 per cent in the US and Europe respectively.
The positive trading came as customers increasingly stocked up on groceries during the coronavirus crisis.
Ahold also enjoyed a 62.6 per cent surge in online consumer sales due to lockdown measures during the pandemic.
But the supermarket group’s net profit dropped almost 85 per cent to €68m over the quarter, which was driven primarily by a €577m provision for a US pension plan withdrawal.
The company also incurred costs of €140m related to Covid-19 during the quarter, taking its total coronavirus-related costs to €470m so far this year.
Ahold said the pandemic would continue to cause uncertainty for the remainder of the year, but raised its guidance for underlying earnings per share to high 20 per cent growth, up from mid to low 20 per cent growth.
The group said it will also hit its target of €7bn net consumer online sales in 2020 — one year ahead of target.