By Hugo Lhomedet, Alban Kacher and Helen Reid
(Reuters) -Dutch supermarket group Ahold Delhaize reported fourth-quarter sales in line with market expectations on Wednesday, but its performance in the key U.S. market and its 2025 operating margin forecast disappointed, sending its shares lower.
The group said it sees an operating margin of around 4% in 2025, as it aims to maintain price competitiveness in the U.S. and expand further in the European market.
Major U.S. retailers including Target (NYSE:TGT) and Walmart (NYSE:WMT) have been pushing to keep prices of essential items low as many Americans shun big-ticket spending and turn to discount shopping in the face of persistent inflation.
Ahold, which owns supermarket chains Food Lion and Stop & Shop and generates more than half of its revenue from the U.S., said it would invest more in lowering product prices this year and aims for cost savings of 1.25 billion euros ($1.30 billion).
The forecast margins for 2025 were below the historical average of "at least 4.0%", analysts at KBC said in a research note.
There is a "historical fear" around the sustainability of Ahold's margins in the U.S., Degroof Petercam analysts said in a research note ahead of the results. The group has been striving to preserve its profitability in this market while facing sluggish volume growth and an aggressive pricing strategy from its peers.
The group announced higher capital expenditure for 2025, at around 2.7 billion euros, for new store openings and investments in technology. Shares in the company, which have gained around 30% over the past year, were trading 4.9% lower at 1133 GMT, at the bottom of the Amsterdam Exchanges Index.
The U.S. was "materially below expectations", due to an increase in pharmacy sales and wage inflation, while the European division "performed much better than anticipated, with sales and underlying operating profit respectively 0.6% and 9.6% above consensus," ING analysts said in a research note.
Ahold reported fourth-quarter sales broadly in line with analysts' expectations, at 23.28 billion euros thanks to strong holiday sales at its U.S. grocery stores and market share gains by its Dutch chain Albert Heijn.
($1 = 0.9653 euros)
($1 = 0.9642 euros)