(Adds detail, analyst comment, share price)

 
   By Maarten van Tartwijk 
 

AMSTERDAM--Supermarket operator Royal Ahold NV (AH.AE) on Wednesday reported improvements in profitability and sales in the third quarter as it works toward its planned merger with rival Delhaize Group (DELB.BT).

The Dutch grocer said net profit rose to 189 million euros ($203 million) in the three months to the end of September, compared with EUR178 million in the same period a year earlier. Underlying operating profit, which excludes restructuring costs and other special items, rose 12% to EUR319 million. Sales rose 14% to EUR8.4 billion.

The results beat analysts' expectations and shares in Ahold rose 4.6% to EUR19.79, the biggest riser in Amsterdam in early trade.

Ahold is in the midst of taking over Belgium's Delhaize in a $29 billion tie-up that would create one of the largest supermarket operators in the U.S. and one of the world's biggest grocers with more than 6,500 stores. It would give the grocers greater buying clout as they struggle with slow growth and fierce competition.

Ahold, which generates around 60% of sales in the U.S. through its Stop & Shop and Giant chains, said underlying sales trends in the U.S. continued to improve in the third quarter. Adjusted for the positive impact of a strike at rival grocer Market Basket last year, sales at stores open at least one year, excluding gasoline, rose 1.8%, it said. Cost-savings boosted the U.S. operating profit margin to 4% from 3.8%.

In the Netherlands, Ahold recorded growth at its Albert Heijn chain and online units, fueled by the Dutch economic recovery. Sales at stores open at least a year rose 4% in the period, compared with a 1.1% decline in the same period a year earlier. The operating profit margin, however, slipped to 4.6% from 4.9% in part due to higher pension costs.

Jefferies analyst James Grzinic said the solid results could make it easier for Ahold to seal the planned tie-up with Delhaize. "[It] inevitably makes the completion of a Delhaize merger under the original terms much more likely," he wrote in a research note.

The chief executives of Ahold and Delhaize, Dick Boer and Frans Muller, will head out on a roadshow in the coming weeks to sell the merger to investors.

Write to Maarten van Tartwijk at Maarten.VanTartwijk@wsj.com

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(END) Dow Jones Newswires

November 11, 2015 06:31 ET (11:31 GMT)