Summary
- Ahold Delhaize combines margin resilience and online growth, with strong Q1 results driven by a robust omnichannel strategy and the successful integration of Profi adding scale and efficiency in Europe.
- The company offers a sustainable 3.2% dividend yield and a total shareholder return of around 6%, supported by prudent capital allocation, healthy cash flows, and a solid balance sheet despite recent acquisitions.
- Valuation remains attractive compared to peers, while the company’s operational discipline and digital advantage position it well for continued earnings growth and defensive stability in a challenging retail landscape.
Introduction
Royal Ahold Delhaize, created from the merger of Ahold and Delhaize in 2016, is a supermarket giant with deep roots in the Netherlands, Belgium and the United States. The company operates well-known brands such as Albert Heijn, Delhaize, Food Lion and bol.com and has a strong position on both sides of the Atlantic. At the beginning of June 2025, the share price is around EUR 37, after a series of positive signals such as solid quarterly results, steady growth in online sales,and the successful integration of the Romanian chain Profi. This acquisition added more than 1,700 stores to the company’s European footprint in one fell swoop.
Ahold Delhaize offers investors an attractive combination of defensive security, a solid dividend and a realistic growth path through omnichannel, economies of scale and technological innovation. The recent rise in the share price is largely due to renewed confidence in profit growth, the strong cash position and the ability to remain resilient in a period of price pressure and inflation.
Ahold Delhaize Builds Strength Amid Margin Pressure
The supermarket sector is in full swing. On the one hand, there is declining food inflation and consumer pressure that encourages price-sensitive behavior. On the other hand, the structural shift to online shopping ensures continued investments in technology, distribution and loyalty programs. Ahold Delhaize is balancing on this intersection. In both the United States and Europe, the company has implemented price reductions for example at Stop & Shop and Albert Heijn. This has allowed it to maintain or even slightly increase market share although these price promotions are putting pressure on margins in the short term.
What is particularly striking is the decisive omnichannel strategy. Online sales grew by 13.7% in the first quarter driven by bol.com and strong performances by the American chains. Food Lion even achieved 40% growth online partly thanks to partnerships with platforms such as DoorDash and Instacart. In Europe, Albert Heijn remains dominant in online groceries, while bol.com is expanding further into home furnishings and electronics. This digital clout gives Ahold Delhaize a clear advantage over many European peers, where the online infrastructure is often less developed.
Another strategic asset is the franchise policy. Delhaize Belgium recently converted all of its own stores to franchising. This operation was drastic but structurally reduces personnel and real estate costs. In Romania, the Profi acquisition adds size and scale which should translate into synergy benefits in the future. Although the margin in Romania is lower in the short term, the potential profit contribution in 2026 and beyond is significant.
Compared to competitors such as Carrefour, Tesco, Sainsbury’s and Colruyt, Ahold Delhaize is doing better on several fronts. Carrefour does offer a higher dividend yield but has to make do with a lower margin profile and greater exposure to the volatile Latin American markets. Tesco and Sainsbury’s are in a highly competitive home market where price pressure is structural. Colruyt (once the textbook example of efficiency) had to cut its dividend after a series of disappointing results. Ahold Delhaize on the other hand combines a healthy margin with geographical spread, operational efficiency and technological advantage.
In the United States, the proposed merger between Kroger and Albertsons is a factor to watch. This merger could lead to a powerful national player but could also open doors for Ahold Delhaize if stores have to be divested in regions where overlap occurs. In that scenario, the company can strengthen local market share through targeted acquisitions.
Stable Margins, Solid Balance Sheet: Ahold Delhaize Delivers in a Volatile Market
The financial results for the first quarter of 2025 confirm the robustness of Ahold Delhaize. Sales grew by 5% to EUR 23.3 billion partly due to the acquisition of Profi but also due to autonomous comparable growth of 3.3%. The underlying operating margin remained stable at 3.8% with strong performance in Europe offsetting margin pressure in the US. In the US, the margin declined slightly due to price investments and a less favorable product mix, while the European activities achieved margin gains due to cost measures and normalizing market conditions.
Underlying earnings per share came in at EUR 0.62, up 4.6% compared to the previous year. Despite an increase in net debt to EUR 15.5 billion (largely due to the Profi acquisition and new lease obligations) the balance sheet remains solid. Interest coverage is above 5x times, indicating that interest obligations are well covered. Free cash flow temporarily decreased to EUR 199 million but this can be explained by the loss of one-off income from 2024 and increased investments. The outlook for the full year remains unchanged. Management is targeting an underlying margin of around 4 percent, free cash flow of at least EUR 2.2 billion and earnings per share growth in the mid- to high-single-digit range. These targets are realistic, provided that consumer demand remains strong and the price promotions have an effect without causing long term margin pressure.
Dividend Stability and Buybacks
Ahold Delhaize has been known for years as a stable dividend payer. A dividend of EUR 1.17 per share was paid out for the 2024 financial year, good for a dividend yield of approximately 3.2%. The payout ratio is approximately 46% of underlying profit, which means that there is sufficient room for future increases. In addition, the company pays dividends twice a year and combines this policy with a large share buyback program. In 2025, Ahold Delhaize will buy back approximately EUR 1 billion worth of its own shares. The total ‘shareholder yield’ is therefore around 6%.
In terms of valuation, the share is listed at a forward P/E ratio of approximately 14x times, slightly above the historical average (P/E ratio of 12x). The EV/EBITDA multiple is 10x times, which compares favorably with sector peers (EV/EBITDA of 12x). This makes Ahold Delhaize attractive as a defensive investment in a portfolio that aims for both income and value growth. The dividend policy is not only attractive but also sustainable. In contrast to peers such as Colruyt or Carrefour, where the dividend is sometimes under pressure due to varying results or regional risks, Ahold Delhaize has a robust free cash flow, a healthy balance sheet and a prudent distribution policy. This makes the share suitable for investors looking for a reliable and growing dividend.
Conclusion
My view is positive. Based on its performance, valuation and strategy, Ahold Delhaize deserves a buy rating. The share is attractively valued compared to its peers, offers a solid dividend and has real growth opportunities through digitalization, economies of scale and loyalty programs. The combination of defensive stability and controlled expansion makes the share attractive for investors with an investment horizon of one to three years.
Of course, there are risks. Continuous price pressure in the US and Europe can put pressure on margins. Currency fluctuations, especially a weaker dollar, can negatively impact the reported results. And although the integration of Profi is going smoothly so far, every acquisition remains an execution risk. Nevertheless, I consider these risks manageable. Ahold Delhaize has previously proven itself to be crisis-resistant, has extensive experience with integration and has sufficient financial room to absorb temporary headwinds.
For investors looking for a defensive share with reliable income and solid growth potential, Ahold Delhaize is an interesting candidate at the current price level. Ahold Delhaize shows that supermarkets can also be a growth story, as long as you invest in the right places and keep putting the customer first.