Despite Lower Revenues, Penn Traffic Narrows Q1 Losses

The Penn Traffic Co. posted revenues for its 82-store continuing operations in the fiscal 2010 first quarter ended May 2 of $200.1 million, vs. $212.1 million in the year-ago period, when the grocer operated 87 stores. Revenues for the fiscal 2010 first quarter reflect lower volume and traffic trends as a result of competitors’ new-store and remodel activity, in addition to macroeconomic conditions, according to Penn Traffic. First-quarter same-store sales decreased 4.8 percent from last year.

The company was able, however, to reduce its net loss from continuing operations to $8.9 million, or $1.05 per share, in the first three months of fiscal 2010, compared with $10.7 million, or $1.26 per share, in the year-ago period.

“As we saw much of the retail grocery industry struggle in the face of the challenging economy, we remained committed to our efforts to attract and retain loyal shoppers, stabilize the top line, and take unnecessary overhead and inefficiencies out of the business,” noted Penn Traffic president and CEO Gregory J. Young. “The lower volume and traffic levels we saw in the first quarter were in line with our internal expectations and offset in part by our aggressive cost-saving measures, allowing us to continue narrowing Penn Traffic’s losses. At the same time, we continued to invest cash in store renovations and other strategic capital projects, while paying down additional debt.”

The grocer maintained relatively stable gross margins at 31.1 percent in the first quarter of fiscal 2010, vs. 31.2 percent last year. Gross profit was $62.3 million in the first quarter of fiscal 2010, compared with $66.0 million during the year-ago period. The company’s operating loss for the first quarter of fiscal 2010 was reduced to $6.9 million, down from $8.9 million during the same period in fiscal 2009.

Syracuse, N.Y.-based Penn Traffic owns and operates supermarkets under the P&C, Quality and BiLo banners in upstate New York, Pennsylvania, Vermont and New Hampshire.
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