Ahold says Stop & Shop strike will hurt 2019 margins
FILE PHOTO: Striking workers gather outside a Stop & Shop store following a speech by former U.S. Vice President Joe Biden, a potential 2020 Democratic presidential candidate, in Boston, Massachusetts, U.S., April 18, 2019. REUTERS/Brian Snyder
AMSTERDAM (Reuters) – Dutch supermarket group Ahold, warned on Tuesday that a strike at its Stop & Shop chain in the United States would hurt its underlying 2019 profit margin.
Ahold said an 11-day strike that ended on Monday would lead to a one-time reduction in underlying operating profit of around $100 million due to lost sales and inventory.
“As a consequence, Ahold Delhaize now anticipates underlying operating margin for the group for 2019 to be slightly lower than 2018,” it said.
“Additionally, the percentage growth of underlying earnings per share in 2019 is revised from high single digits to low single digits.”
Shares fell 4.5 percent to 21.04 euros by 0732 GMT in Amsterdam.
The strike involved 30,000 workers in Connecticut, Massachusetts and Rhode Island. Ahold said all would receive better pay, and those eligible would receive continued health insurance and pension benefits.
Ahold kept its full-year free cash flow estimates unchanged at 1.8 billion euros ($2.02 billion), due to expected growth at its other chains in the United States and Europe.
(This story corrects day in lead paragraph)
Reporting by Toby Sterling; Editing by Kirsten Donovan