Strong Close to the Year for Ahold Delhaize With Conservative Guidance; Shares Rich

Ahold Delhaize released fourth-quarter results that included sales up 15.9% to EUR 23.4 billion (up 8.1% at constant exchange rates), surprising on the upside. More specifically, sales were ahead of the company-compiled consensus (EUR 23.4 billion versus EUR 23.29 billion) with underlying operating income of EUR 1,026 million ahead of the EUR 890 million company-compiled consensus, primarily driven by higher-than-expected cost savings (EUR 100 million over expectations). Comparable sales growth was 9.3% and 5.7% for the U.S. and Europe, respectively, versus 8.1% and 5.9% estimates for company-compiled consensus. In the U.S., the main driver of outperformance was the strong performance of remodeled stores at Stop & Shop and the resilient performance of loyalty programs and online channel. In Europe, bol.com and the challenging e-commerce market in Benelux weighed on top-line growth (Europe up 6.9% excluding bol.com).