Harris Teeter Posts Higher Q3 Sales
Harris Teeter Supermarkets Inc. reported that sales for the third quarter of fiscal 2012 ended July 1 increased 4.6 percent to $1.15 billion from $1.10 billion in year-ago period. For the 39 weeks ended July 1, sales grew 6.5 percent to $3.39 billion, from $3.18 billion last year.
The Matthews, N.C.-based grocer attributed the sales increase to comparable-store sales growth and sales from new stores, partially offset by store closings. Comps went up 3.70 percent for the quarter, and 4.30 percent for the 39-week period ended July 1, from the respective year-ago periods.
Net earnings were $15.8 million for the third quarter of fiscal 2012, versus $32.1 million last year, while net earnings for the 39 weeks ended July 1 came to $59.7 million.
“Our pricing and promotional strategies continue to be effective in driving unit sales, customer visits and increasing market share,” Harris Teeter Chairman and CEO Thomas W. Dickson. “During the quarter, we experienced increased unit sales on a comparable-store basis and have continued this positive trend into the fourth quarter. In addition, our store-brand penetration on both a unit and sales dollar basis improved over the prior year. We believe these positive results are a result of our continuing commitment to our customers to deliver outstanding values and excellent customer service.”
Over the first nine months of fiscal 2012, the company opened six new stores, one of which was a replacement location, and closed eight stores, including six stores sold to Winston-Salem, N.C.-based Lowes Foods Stores Inc. and one store which is expected to be replaced with a new store opening in fiscal 2013. Since the end of the third quarter of fiscal 2011, Harris Teeter has opened seven new stores and closed nine, including the six stores sold to Lowes, for a net reduction of two stores.
The Southeastern regional grocer’s capital expenditures are expected to total about $215 million for fiscal 2012 and $255 million for fiscal 2013. During the fourth quarter of fiscal 2012, the Harris Teeter will open a total of seven stores, six of the 10 stores acquired from Lowes, and one additional store, and complete major remodels on nine stores, five of which will made larger. The company added that it would continue to ramp up its new store growth, with ongoing expansion in its existing eight-state footprint, which includes the Washington, D.C., metro market area.
Despite its encouraging results, the company’s management was cautious in its expectations for the remainder of fiscal 2012 because of current economic climate and its impact on consumers. During the fourth quarter of fiscal 2012, Harris Teeter said it anticipated incurring about $4.4 million of further expense related to the Lowes transaction.