By Andrea Figueras

Food Lion owner Ahold Delhaize said U.S. sales and profitability fell in the key fourth quarter as the company sought to rein in prices to lure shoppers back to stores.

Quarterly sales volumes for the Dutch group, which also owns the Stop & Shop and Giant grocery chains, fell 0.6% in the U.S. excluding currency movements to 13.87 billion euros ($14.37 billion). The company said the sale of FreshDirect weighed on its performance.

Ahold Delhaize's U.S. underlying operating margin fell to 4.2% from 5.2% a year before. The margin for the group as a whole was 4.1%. The company said measures to bring down prices at Stop & Shop took a toll on the profitability of the group's U.S. business.

The result in the U.S. was materially below expectations, ING analysts Maxime Stranart and Hans d'Haese said in a research note.

However, the company said it had a strong holiday period in the U.S. and saw an increase in online sales.

The company forecasts profitability--as measured by its underlying operating profit margin--to be flat in 2025 compared with last year. The grocer doesn't anticipate a heavy impact from tariffs implemented by the Trump administration, Chief Executive Frans Muller said.

"Food retail is very local and although we import a few things from Asia and Europe, it is a relatively small share," Muller said during a call.

Globally, the company generated sales revenue of 23.28 billion euros for the fourth quarter, up 1% on the year-earlier period. The result compares with analysts' expectations of 23.21 billion euros, according to a poll of estimates provided by the company.

Net profit dropped nearly 16% to 380 million euros, missing analysts' projections of 611 million euros.

As consumers tightened their belts, some grocers decided to invest in their own-label products. This followed price increases in recent years to cope with higher costs at the expense of volumes.

Shares in Ahold Delhaize fell 4.9% in European midday trading.

For 2025, the company expects an underlying operating margin of around 4%, in line with what it reported for last year, and growth in underlying earnings per share of mid-to-high single percentage digits. Muller said the year had started strong.

The company proposed a dividend of 1.17 euros per share for 2024, an increase of 6.4% compared with the prior year.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

February 12, 2025 08:12 ET (13:12 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.