However, the acquisition of Lady Baltimore in Kansas City and Allen Foods in St. Louis in September and December of 2002, respectively, offset negative performance somewhat, providing approximately 1.5% of net sales growth in the first half.
USF operating income before goodwill and exceptional items in the first half also were negatively impacting by consequences of the accounting irregularities. Substantial pressure was placed on gross margins, especially in the first quarter of 2003. Operating costs increased as well.
The "run rate" of the first half will be a "fair reflection" of USF performance for the year, Ahold said.
Total Ahold sales for the first half amounted to 30.3 billion euros, a decrease of 11.8% as compared with the equivalent 2002 period. The drop was largely attributable to lower currency exchange rates of the U.S. dollar in particular. The average U.S. dollar to euro exchange rate decreased approximately 18% in the first half of 2003, as compared with the same 2002 period. Net sales excluding currency impact increased 3.6%, primarily as a result of a 3.2% increase in net sales in U.S. retail and 1.7% increase in European retail business. Operating income in the first half amounted to 587 euros, a decrease of 17.2% compared with the same period last year.
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