Belgian retailer Delhaize has posted a drop in first-half profits and said it now expects to achieve the bottom-end of its full-year earnings guidance range.
Profit in the six months to the end of June slumped 65.9% to EUR83m (US$103.5m), Delhaize reported today (22 August). The retailer blamed a "portfolio optimisation charge" of EUR133m in the US.
Underlying operating profit slid 13.3% to EUR373m, while underlying operating margin dropped to 3.3% of revenues. Delhaize said the decline was a result of "substantial" price investments at Food Lion as part of a brand repositioning at the US chain. It also expanding another US retailer, Bottom Dollar Food.
Sales, however, climbed 10.1% to reach EUR11.17bn in the period, and 5% at identical exchange rates.
"We confirm that we will reach our full-year underlying operating profit guidance," said CEO Pierre-Olivier Beckers. "However, we expect to achieve the bottom end of the range as we remain committed to improving our customers' experience in terms of both price and service."
The retailer is expecting a decrease in underlying operating profit of between 15% and 20%.