Dive Brief:
- Royal Ahold posted operating income of $533.69 million in the first quarter, down 6.2% and well below what analysts had expected.
- The parent of retail chains such as Stop & Shop and Giant said comparable-store sales rose only 0.1%. Operating margins fell as costs rose faster than retail prices.
- The Dutch company, which earns the majority of its revenue from U.S. operations, warned that it expected margins to tighten further this quarter as the company expands investment in new products.
Dive Insight:
There is one silver lining surrounding the cloud that is Ahold's earnings -- online sales rose 29% as the company added 47 pick-up points. Ahold stores now have 167 pick-up points tied to online sales (the company also operates the Web-based Peapod delivery service) and plans to reach 200 pick-up points this year.