By Diana Mandia
(Reuters) -Ahold Delhaize on Wednesday reported third quarter earnings that beat analysts' estimates and raised its full year earnings forecast for the third time this year, citing strong U.S. sales and margins.
Ahold, which operates the Albert Heijn chain in the Netherlands and Stop & Shop, Giant, Food Lion and Hannaford in the United States, reported a 9.1% increase in net sales at constant exchange rates and a 9.7% increase in underlying operating income to 993 million euros ($997 million).
Analysts had seen underlying operating income at 885 million euros.
Shares surrendered early gains and were flat at 28.71 euros at 0949 GMT in Amsterdam, down 4% year to date.
"Once again Ahold results were stronger than expected on both top line and earnings," said JPMorgan analysts in a note.
The company said it now expects underlying per share earnings to rise by "double digits" in 2022. It had started the year forecasting EPS to fall as the COVID-19 pandemic waned but in August reversed that to a mid-single-digit percentage rise.
"We've seen sequential improvement in comparable sales and profitability," CFO Natalie Knight said in an interview. She said the group has won market share on both continents, while margins have been more resilient in the United States.
"The other piece ... is that interest rates and foreign exchange are playing our way."
The group, which is working with suppliers to mitigate cost increases and expanding its own-brand offers, also announced a new 1 billion euros share buy-back programme to start at the beginning of 2023.
In the United States, Ahold has been investing in revamping Stop & Shop stores and expanding online offerings. U.S. sales grew 8.2% at constant exchange rates for the 13 weeks ended Oct. 2.
That is slightly better than same-store sales numbers recently reported by U.S. peers including rivals Kroger and Albertsons, which in October agreed to merge.
($1 = 0.9933 euros)
(Reporting by Diana Mandiá; Editing by Matt Scuffham, Elaine Hardcastle and Catherine Evans)