Stater Bros.' fiscal Q1 earnings grew to US$11.1M from US$5.4M a year ago as consolidated sales rose 1.6% to US$984M, comparable-store sales increased 1.4%; company sacrificing gross margin to keep prices low for customers during economic downturn
Cindy Allen
SAN BERNARDINO, California
,
February 12, 2014
(press release)
–
Today,
Jack H. Brown, Chairman, President and Chief Executive Officer of Stater Bros. Holdings Inc. announced financial results for the thirteen week period ended
December 29, 2013.
The Company's consolidated sales in the thirteen weeks ended December 29, 2013 were $984.0 million up $15.3 million or 1.58% from the thirteen weeks ended December 30, 2012 consolidated sales of $968.7 million. Like store sales also increased $13.7 million or 1.42% for the thirteen weeks ended December 29, 2013 compared to the thirteen weeks ended December 30, 2012. Gross profit margins for the thirteen weeks ended December 29, 2013 were 26.28% of sales compared to the thirteen weeks ended December 30, 2012 gross profit margin of 25.88% of sales. The Company reported net income for the first quarter ended December 29, 2013 of $11.1 million compared to net income of $5.4 million for first quarter of the prior fiscal year. Brown said, "We are pleased with our sales and customer count growth in the first quarter of fiscal 2014 given the extremely competitive environment in Southern California. We continue to be the number '1' full service supermarket chain in Southern California. "We believe that our sales and customer count growth is due to our 'Valued Customers' positive response to our 'Low Price' marketing strategy of keeping our prices as low as possible during these continued challenging economic times while continuing to provide our customers the service and value they deserve on each of their visits to their local Stater Bros.' supermarket. "During the extended economic downturn, we have sacrificed gross margin by not fully passing on the costs of inflation which has allowed us to keep our prices low for our 'Valued Customers'. In addition, in order to continue to invest in our customers, we are constantly looking for opportunities where we can reduce our costs in areas such as improving our shrink or product loss, and improving our efficiencies at both our stores and in our distribution facility. "Our strategy over the past several years has had a positive impact on our sales growth. We have been and remain committed to providing low prices, great value and outstanding service to all of our 'Valued Customers'." Stater Bros. is the largest privately owned Supermarket Chain in Southern California and the largest private employer in both San Bernardino County and Riverside County, with annual sales in 2013 of $3.9 billion. The Company currently operates 167 Supermarkets, and there are over 18,000 members of the Stater Bros. Supermarket Family. STATER BROS ... PROUDLY SERVING SOUTHERN CALIFORNIA FAMILIES FOR 78 YEARS STATER BROS. HOLDINGS INC. Condensed Consolidated Balance Sheets (In thousands) Unaudited 09/29/13 12/29/13 Assets Current assets Cash and cash equivalents $ 242,818 $ 210,949 Receivables, net 37,493 49,773 Inventories 228,116 258,192 Other 39,876 40,338 Total current assets 548,303 559,252 Property and equipment, net 600,019 597,624 Deferred debt issuance costs, net 6,173 5,628 Other 42,851 45,976 Total assets $ 1,197,346 $ 1,208,480 Liabilities and stockholder's equity Current liabilities Accounts payable $ 144,214 $ 151,446 Accrued expenses and other liabilities 153,987 152,334 Current portion of long-term debt 25,582 90,503 Total current liabilities 323,783 394,283 Long-term debt, less current portion 608,711 540,000 Capital lease obligations, less current portion 414 291 Other long-term liabilities 150,988 149,400 Total stockholder's equity 113,450 124,506 Total liabilities and stockholder's equity $ 1,197,346 $ 1,208,480 STATER BROS. HOLDINGS INC. Condensed Consolidated Statements of Income (In thousands) Unaudited 13 Weeks 13 Weeks Ended Ended 12/30/12 12/29/13 Sales $ 968,744 $ 984,025 Gross profit 250,729 258,635 Operating expenses: Selling, general and administrative expenses 220,079 217,138 (Gain) loss on sale of property and equipment (1,933) 10 Depreciation and amortization 11,683 11,373 Total operating expenses 229,829 228,521 Operating profit 20,900 30,114 Interest income 23 15 Interest expense (11,809) (11,486) Income before income taxes 9,114 18,643 Income taxes 3,665 7,587 Net income $ 5,449 $ 11,056
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