Ahold Sees Further Market Pressure; Dutch Retailer Hurt by Low Inflation, Falling Sales
AMSTERDAM--Dutch retailer Royal Ahold NV said Wednesday that first quarter net profit fell 97% as last year's results were boosted by a large gain, and that it expects volumes to remain under pressure during the second quarter.</br></br>First quarter net profit was [euro]50 million ($68.2 million) compared with [euro]1.95 billion a year earlier, when it booked a [euro]1.75 billion gain from the sale of its stake in Swedish retailer ICA.</br></br>In the first quarter Ahold set aside a [euro]177 million provision to settle a class-action lawsuit related to improper accounting practices at its former subsidiary, U.S. Foodservice.</br></br>First-quarter sales were down 2.5% at [euro]9.82 billion from [euro]10.1 billion in the first quarter of 2013. Excluding the impact of currency losses, sales were up 0.3%.</br></br>"First-quarter sales trends were similar to the previous quarter with a flat year-on-year performance, impacted by low inflation and volumes that remained under pressure in all our markets," Chief Executive Dick Boer said. Ahold, which generates around 60% of its sales in the U.S., said it expects trading conditions in the second quarter to be similar to the first quarter.