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Ahold Delhaize's resilient US performance tops profit expectations

Ahold Delhaize beat the market's expectations for its first-quarter core profit on Wednesday as its U.S. operations remained strong despite falling consumer confidence and a weaker dollar.

The Dutch group that operates Stop & Shop, Giant Food Lion, Hannaford, and Albert Heijn in the U.S., and Delhaize in the Netherlands and Belgium reported a 0.7% increase in its underlying operating profit to 896 million euro ($1.05 billion), exceeding analysts' expectations of 858 millions euros.

The core earnings increased 8.1% at constant exchange rates compared to the previous year.

As a result of the currency exchange rate, the group's results are reduced when the U.S. dollars are converted to euros. U.S. consumer confidence also hit an all-time-low in April as the inflation brought on by the U.S./Israeli war against Iran continued to affect households.

In a recent statement, Frans Muller, CEO of the company, said that disruptions from geopolitical tensions and volatility, such as the recent conflict in the Middle East are "a reality" our business has dealt with before.

He added: "We are relying on our past experience and the measures we have taken in the last few years to limit the short-term effects." The Strait of Hormuz war has caused disruptions in shipping, which have pushed up the price of oil and ultimately gasoline and diesel. Other commodities such as?fertilizers and petrochemicals have also risen in price and will soon impact on consumers.

Ahold Delhaize’s first quarter sales increased 2% at constant exchange rates but declined?4.3% when reported. The?group said that Kingfisher CEO Thierry Garcia would succeed Muller in April 2027.

(source: Reuters)