News Summary

  • Ahold Delhaize's U.S. operations saw online sales grow 14.3% year-over-year in the first quarter of fiscal 2026, but net sales and comparable sales only grew 1.5%, resulting in a lackluster performance.
  • CEO Frans Muller noted that results were negatively impacted by "sharp deflation" in egg prices, the effect of the Inflation Reduction Act on drug pricing, and reduced SNAP eligibility.
  • The company plans to accelerate Stop & Shop store renovations and price investment rollouts, as the brand's performance continues to improve.

In-Depth Analysis

Ahold Delhaize started fiscal 2026 with strong momentum in online sales, but overall growth in its U.S. business remained weak. According to the earnings report released Wednesday, the U.S. division's Q1 online sales grew 14.3%, but net sales and comparable sales only grew 1.5% each. CEO Frans Muller stated in the report that results were dragged down by "sharp deflation" in egg prices, the impact of the Inflation Reduction Act on drug pricing, and reduced SNAP eligibility.

CFO Jolanda Poots-Bijl told investors that the company will closely monitor fluctuations in egg prices, changes in drug pricing, and the impact of reduced SNAP eligibility this year. She expects that drug pricing alone will impact reported and comparable sales by approximately $450 million in 2026, while egg prices will continue to affect revenue in the next quarter but are expected to stabilize in the second half of the year.

As part of advancing the "Growing Together" strategy, Ahold Delhaize's U.S. operations will continue to focus on improving its private brand portfolio, making price investments, and expanding e-commerce. ADUSA's private brands continue to outperform other in-store items in both sales and volume. This year, the company will also make a second round of price investments.

Muller said Stop & Shop has benefited from improvements in pricing and store experience. ADUSA plans to extend price investments to all stores of the brand by the end of this year and accelerate Stop & Shop's store renovation program, with plans to complete renovations at more than 40 stores in 2026.

Muller noted that this quarter marks ADUSA's eighth consecutive quarter of double-digit online sales growth. Poots-Bijl added that Q1 omnichannel penetration reached a record 10%, with some brands exceeding 11%. Online sales growth through third-party partners like Instacart exceeded 20%.

Muller also mentioned economic changes from ongoing conflicts in the Middle East, particularly rising energy prices—which, while "not unfamiliar to us"—are putting pressure on household budgets. He said, "We have dealt with similar situations before and are now applying those lessons." He added that the company continues to invest in pricing, strengthen its energy position by shifting to long-term contracts and increasing renewable energy use, and will take measures to ensure transparency and fairness in supplier cost increases.

While ADUSA awaits a new CEO, there have been several executive changes at the parent company level. Muller has confirmed his retirement plans to investors, and Ahold Delhaize's board has nominated Thierry Garnier, CEO of UK home improvement company Kingfisher, to succeed him in April 2027. Additionally, the company recently announced that Claude Sarrailh, CEO of its Europe and Indonesia divisions, and Petr Pavlik, president of the Albert brand in the Czech Republic, will leave the company.