Sales rose by 4.5% to € 7,290m (KBCS € 7,374m; consensus € 7,360m). This is 1% below consensus. At identical exchange rates sales were up 4.3%. The press release mentions growing market share in the US and the Netherlands.
USA:
Sales increased by 5.0% to $ 5,887m (KBCS $ 5,985m and consensus $ 5,891m). The actual figure came out 0.1% below consensus. Identical sales excluding gasoline rose by 2.9% (KBCS 3.5%; consensus 3.0%). Including gasoline, identical sales were up 3.9% (KBCS 5.5% and consensus 4.7%).
The Netherlands:
Sales rose by 4.3% to € 2,506m (KBCS € 2,511m and consensus € 2,482m) hereby exceeding consensus by 1.0%. Identical sales were up 2.9% (KBCS 2.5% and consensus 2.7%).
Central Europe:
Sales fell by 3.5% (1.6% at constant exchange rates) to € 413m (KBCS € 450m and consensus € 439m). This is 5.9% below consensus.
Conclusion:
(10,25 EUR, -0,24%) reported comforting sales trends for 4Q11. Whereas Delhaize America’s comparable store sales fell by 0.4% in 4Q11, reported identical sales growth of 2.9% excluding gasoline. Sales in the US came out in line with expectations, while in the Netherlands sales exceeded market expectations by 1.0% despite fiercer competition as the conversion of Super de Boer stores into Jumbo stores continues. Central European operations disappointed with a 3.5% decline in sales. Note however that these activities represent only 6% of group sales. We’ll fine-tune our forecasts to include the actual sales figures and to change our $ /€ rate assumption from 1.35 for 2012-2013 to 1.29.
Speculation regarding a potential acquisition (e.g. Wehkamp) should continue to impact the share price. The group is sitting on a gross cash pile (€ 2.3bn at the endof 3Q11) and is ready to pursue growth thanks to its streamlined organisation and harmonised business processes.
The 4Q11 results will be released on 1 March. We maintain our Accumulate rating and € 11.5 target as the stock continues to trade attractive multiples.