Harris Teeter Helps Parent Company’s Q2 Sales
Ruddick Corp., the parent company of Southeast regional grocer Harris Teeter reported consolidated sales for the fiscal second quarter ended April 3 of $1.13 billion, a 5.7 percent increase from the $1.07 billion posted in the year-ago period. For the 26 weeks ended April 3, consolidated sales increased 6.0 percent to $2.24 billion from $2.11 billion last year. The Charlotte, N.C.-based company attributed these results to sales increases at both of its operating subsidiaries: Harris Teeter and American & Efird, a sewing thread and technical textiles subsidiary.
Ruddick’s consolidated net income in the second quarter of fiscal 2011 grew 8.8 percent to $29.9 million, or 61 cents per diluted share, from $27.5 million, or 57 cents per diluted share, in the year-ago period, which the company again attributed to operating profit improvements at both subsidiaries over last year. For the 26 weeks ended April 3, consolidated net income rose 32.9 percent to $68.0 million, or $1.39 per diluted share, from the $51.2 million, or $1.06 per diluted share posted last year. Ruddick noted that this increase was because of operating profit improvements at both operating subsidiaries and a pre-tax gain of from the sale of the company’s interest in a foreign investment in the first quarter of fiscal 2011.
Harris Teeter’s sales increased 4.9 percent to $1.05 billion in the second quarter of fiscal 2011, from sales of $1.00 billion last year. For the 26 weeks ended April 3, sales grew 5.5 percent to $2.08 billion from $1.97 billion in the year-ago period. The increase in sales for the quarter and 26-week period was because of incremental new store sales and an increase in comparable-store sales of 1.42 percent for the quarter and 1.81 percent for the 26-week period, according to Ruddick.
Harris Teeter’s operating profit for the second quarter of fiscal 2011 rose 7.1 percent to $50.5 million (4.81 percent of sales) from $47.1 million (4.71 percent of sales) posted last year, while. for the 26 weeks ended April 3, operating profit went up 6.7 percent to $95.4 million (4.58 percent of sales), from $89.4 million (4.53 percent of sales) in the year-ago period. Ruddick said that these increases were primarily the result of Harris Teeter’s higher sales and an ongoing emphasis on operational efficiencies and cost controls.
“Our comparable-store sales remain strong on a comparable holiday basis,” noted Thomas W. Dickson, Ruddick’s chairman of the board, president and CEO. “For a number of our customers, consumer confidence appears to be more optimistic, as evidenced by a trading up in categories such as premium meats and wines, specialty breads, and fresh produce. We are also seeing an increase in purchases of other categories such as prepared dinners, bottled water, organic produce, natural bulk foods and frozen natural and organic items, all of which had declined during the recession. … While we remain cautious in our expectations for the remainder of the year, we are encouraged by the indication of a more positive change in our customers’ purchasing habits and will continue to adjust our promotional activity to continue to increase our market share. In addition, we remain focused on controlling both store operating and corporate expenses.”
The grocer’s cap ex plans include the continued expansion of its existing markets, including the Washington metro market area incorporating northern Virginia, the District of Columbia, southern Maryland and coastal Delaware.