Koninklijke Ahold Delhaize (AD) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales reached €23.3 billion, up 5% at constant rates and 7.1% at actual rates, driven by the Profi acquisition and strong omnichannel and online growth in both the U.S. and Europe despite volatile macroeconomic and geopolitical conditions.

• Online sales surged 13.7% at constant rates, with double-digit growth in both regions and bol, and U.S. online penetration reaching record highs.

• Underlying operating margin was 3.8%, slightly down due to U.S. price investments; diluted underlying EPS rose 4.6% to €0.62.

• Profi integration added over 1,700 stores and contributed €647 million in sales, supporting ambitions for market leadership in key regions.

• Free cash flow was €199 million, down from Q1 2024 due to increased net investments and the Profi acquisition.

Financial highlights

• Net sales increased 5% year-over-year to €23.3 billion; underlying operating margin was 3.8%.

• Diluted underlying EPS rose 4.6% to €0.62, supported by higher operating profit and share buybacks.

• Comparable sales growth was 3.3% group-wide, with U.S. +3.1% and Europe +3.7%; online sales up 13.7% and U.S. online sales up 17.9%.

• Operating income was €880 million (+6.8% at constant rates); underlying operating income was €890 million (+0.9% at constant rates).

• Free cash flow was €199 million, down €178 million from Q1 2024 due to increased net investments.

Outlook and guidance

• 2025 outlook reiterated: underlying operating margin around 4%, mid- to high-single-digit underlying EPS growth, free cash flow at least €2.2 billion, and gross capital expenditures around €2.7 billion.

• Profi acquisition expected to add ~€3 billion in net sales for 2025; Stop & Shop closures and tobacco sales cessation to impact reported sales.

• Management remains committed to dividend growth and a €1 billion share buyback program.

• Expect Profi to contribute positively to margins from 2026 as synergies materialize.

• Year-over-year growth in dividend per share and €1bn share buyback planned.