A&P Widens Loss in Q4

The economic landscape is proving to be rocky for the Great Atlantic & Pacific Tea Co., Inc., which for its fiscal 2008 13-week fourth quarter ended Feb. 28, 2009 posted a loss from continuing operations of $83.4 million, compared with a loss of $44.6 million for last year’s 12-week quarter.

Sales for the quarter were $2.3 billion, compared with $2.2 billion in the prior year’s 12-week fourth quarter. Comparable-store sales dipped 1.3 percent during the comparable 13-week period.

Loss from continuing operations for the 53-week full year was $86.2 million, compared with income from continuing operations of $87.0 million for the 52-week fiscal 2007, which included a gain of $184.5 million from the sale of onetime Canadian division Metro, Inc. shares.

For the 53-week full year, sales were $9.5 billion vs. $6.4 billion for the 52-week fiscal 2007. Comps grew 2.0 percent for A&P and 0.8 percent for Pathmark, when measured during the same period. The prior year’s results exclude the results of Pathmark before its acquisition by Pathmark on Dec. 3, 2007.

“Although we are fortunate to be in the supermarket business, we are all feeling the effects of a cash-strapped consumer,” noted A&P president and CEO Eric Claus. “Despite the difficult environment we made much progress again this quarter, delivering positive cash flow and improved adjusted EBITDA.”

Although the grocer’s Fresh, Gourmet and Discount formats performed well, Claus admitted that “[o]ur Price Impact or Pathmark stores were a challenge for the year. However, our team has worked hard to create more value than ever for our customers, and we will see this business grow as our value-enhancing initiatives take hold.”

Company officials remained determinedly upbeat despite the bleak economic forecast, focusing on the gains made during the quarter and on A&P’s eventual return to profitability.

Claus said that on the heels of the integration of Pathmark, A&P is rolling out a business optimization program, “whereby we are utilizing the knowledge and strengths from each business and incorporating best practices to further improve gross margins and reduce operating costs.”

Christian Haub, executive chairman of the A&P board, noted, “Clearly, the U.S. retail market is facing one of the most challenging years in 2009[, but] we are prepared to weather this economic storm and preserve the strategic value of A&P for the future.”

Montvale, N.J.-based A&P operates 436 stores in eight states and the District of Columbia under the following banners: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics.
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