Delhaize posts below-forecast rise in FY sales, top-end guidance UPDATE

Delhaize posts below-forecast rise in FY sales, top-end guidance UPDATE

	Published : Thu, 18 Jan 2007 09:20 By : Agencies Print this Story

(Updates with further detail on regional performance)

BRUSSELS (AFX) - Delhaize SA posted a lower-than-forecast rise in full year sales, which was however at the top end of its own guidance, driven by its US and Belgian operations.

Sales for the supermarket group -- listed in both Belgium and the US -- came in at 19.22 bln eur, up 4.8 pct from 18.35 bln last year, but below forecasts of 19.27-19.43 bln.

On guidance, Delhaize targeted full year sales climbing 4.5-5.5 pct at identical exchange rates. At identical rates, the rise was 5.5 pct.

Fourth quarter sales fell to 4.85 bln eur from 4.89 bln, impacted by currency effects. Analysts forecast the figure at 4.88-4.90 bln.

For the full year, US sales rose 4.4 pct to 17.29 bln usd from 16.56 bln and Belgium sales rose 6.9 to 4.28 bln eur from 4.01 bln.

Greece sales rose 13.5 pct to 1.03 bln eur from 908.00 mln, while emerging markets sales rose 16.1 pct to 136.9 mln eur from 117.9 mln.

For the fourth quarter, US sales rose 3.8 pct to 4.37 bln usd from 4.21 bln, while Belgium sales rose 4.4 pct to 1.13 bln eur from 1.08 bln.

The group posted organic sales growth of 5 pct for the full year, resulting in a comparable US store sales growth of 2.7 pct -- in line with 2.5-3.0 pct guidance -- while Belgian comparable store sales growth was 2.6 pct.

Delhaize commented that US sales were supported by a strong performance at Food Lion, effective price, promotion and marketing initiatives, and the success of the market renewal program.

Sales momentum at Hannaford was supported by its competitive pricing and recent store openings. Sweetbay sales were negatively impacted by remodeling activity and weakness at the non-converted Kash n' Karry stores.

The group said it would add 101 stores to its network in 2007, bringing the total to 2,709 stores by the year end.

For the US, this will result in a net increase of 23 stores to a total number of 1,572 stores at the end of 2007.

It added that capital expenditure seen in 2007 amounts to 825 mln eur.

Chief executive Pierre-Olivier Beckers said: 'We are pleased that, in the fourth quarter of 2006, our operating companies were able to sustain the strong sales momentum of the first nine months of the year.'

'Consequently, Delhaize sales growth for the full year came out at the top end of our expectations, and our 2006 performance marks the fourth consecutive year of accelerating sales momentum'.

'Our store opening program and other planned initiatives for 2007 leave us confident that we will continue our profitable growth in 2007'.

simon.zekaria@thomson.com

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