Supermarkets

Royal Ahold nv

Dutch company Royal Ahold <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AHO)") else Response.Write("(NYSE: AHO)") end if %> is the fifth-largest food retailer in the U.S. and the largest European company to have a presence in the U.S. Ahold USA is a leader on the East Coast, operating BI-LO, Giant Food Stores (including Edwards), Tops Markets (including Finast), and Stop & Shop companies encompassing 800 stores with sales of approximately $14 billion. The ironic element here is that European investors find the consolidation prospects in the U.S. extremely exciting while most U.S. investors have been fighting yawns. The valuation for Ahold is rather rich, with expected annualized growth coming in at 15%. Investors are currently paying 25 times forward earnings, which is quite a growth premium in comparison to its peers.

Latest Financials

Royal Ahold announced that in the 1997 second quarter ended July 13, 1997 it achieved net earnings (in Dutch Guilders) of NLG 207.4 million (1996: NLG 121.3 million), a 71.0% rise. Net earnings totaled NLG 203.1 million after deduction of the preferred dividend. Earnings per common share amounted to NLG 0.39 (1996: NLG 0.31), a rise of 26.6%. The acquisition of the Stop & Shop supermarket chain in July 1996 contributed largely to the considerable growth in net earnings. In addition, the results in guilders were positively influenced by the higher exchange rate of the U.S. dollar (NLG 1.94 vs. NLG 1.71).

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