Royal Ahold (AHONY) , the Dutch owner of Stop & Shop and Giant Food Stores in the U.S., can dance down the aisle with its Belgian merger partner after a strong start to the year.

The grocery retailer said it's on track to close its merger with Delhaize, of Brussels, by mid-year as it beat expectations on first-quarter results despite higher than expected corporate costs.

First-quarter adjusted operating income increased 14.7% to € 449 million ($500.6 million), topping the €434 million average prediction in a Bloomberg analyst poll.

Sales rose 3.5% to around €11.8 billion, while the profit margin widened from 3.5% to 3.8%.

Ahold shares added 2.3% in Amsterdam morning trading to €20.37, putting its market value at €16.6 billion. Delhaize shares were also up, adding more than 2% in Brussels to trade at €96.12 for a market capitalization of €9.85 billion.

Analyst Alan Vandenberghe of KBC Securities in Brussels reiterated his buy rating on Ahold along with a price target of €24.50, noting that "Ahold continues to deliver strong results which confirms the positive momentum."

Looking at the specifics, Ahold recorded strong growth online and across all its main markets, led by the U.S. and the Netherlands. Ahold also boosted its free cash flow.

U.S. net sales were up 4.0%, or 3.0% at constant exchange rates, which Ahold attributed to the addition of 25 A&P stores in the New York metropolitan area in the fourth quarter.

Ahlold's Peapod online business also fared well, recording double-digit sales growth also amid expansion in the Big Apple and the recent launch of its own-brand line of ready-to-prepare Meal Kits designed for busy families.

In a statement, Ahold CEO Dick Boer said the company continues to "make good progress" on its proposed merger with Delhaize, saying it will create a "better and more innovative retailer" delivering better value for customers and shareholders. 

Later in a conference call, Boer said the company was in "close contact" with several potential buyers for the stores it's promised to sell in return for Belgian regulatory clearance of the Delhaize deal. They consist of eight Ahold-owned Albert Heijn stores and five Delhaize franchised outlets operating under the Proxy and AD Delhaize names.

Ahold repeated its full-year outlook of underlying operating margins to "trend with" 2015, excluding the potential impact of the impending tie-up with Delhaize.