Harris Teeter Q1 Sales Up
Harris Teeter Supermarkets Inc. has reported that sales for the first quarter of fiscal 2013 ended Jan. 1, 2013 grew 3.7 percent to $1.16 billion, from $1.12 billion in the year-ago period. According to Matthews, N.C.-based Harris Teeter, the sales increase was driven by a comparable-store sale rise of 2.53 percent and sales from new stores, partly offset by store closings.
During the first quarter of fiscal 2013, the grocer opened three new stores, two of which were stores purchased from Winston-Salem, N.C.-based Lowe’s Food Stores Inc. that were reopened under a new format and banner, 201central. Since the end of the first quarter of fiscal 2012, Harris Teeter has opened 12 new stores, opened one store that replaced a store closed in the first quarter of fiscal 2012, closed two stores and sold six stores to Lowes, for a net addition of five stores. The company operated 211 stores as of Jan. 1.
Gross profit in the first quarter of fiscal 2013 increased 2.4 percent to $334.7 million (28.83 percent of sales), from $326.8 million (29.19 percent of sales) last year. The fiscal 2013 annual inflation rate, as estimated by the company, has moderated since the first quarter of fiscal 2012.
Operating profit for the first quarter of fiscal 2013 was $40.5 million (3.48 percent of sales), versus $46.3 million (4.13 percent of sales) in the year-ago period. Operating profit fell $3.1 million, or 27 basis points, between the first quarter of fiscal 2012 and the first quarter of fiscal 2013, in connection with the operations and startup costs of the 10 stores acquired from Lowes and the six locations sold to that company.
Net earnings for the first quarter of fiscal 2013 came to $22.8 million, or 46 cents per diluted share, compared with $13.7 million, or 28 cents per diluted share, last year. Net earnings for the first quarter of fiscal 2012 comprised earnings from continuing operations of $25.8 million, or 53 cents per diluted share, and losses from discontinued operations of $12.1 million, or 25 cents per diluted share.
“We continue to focus on driving unit sales and growing our market share,” said Thomas W. Dickson, chairman of the board and CEO of the regional grocery chain, which operates stores in eight southeastern and mid-Atlantic states, and the District of Columbia. “During the first quarter of fiscal 2013, our pricing and promotional strategies were effective in this regard, as evidenced by an increase in the number of active households and number of customer visits we experienced over the prior year. However, aggressive pricing by competitors, low inflation during the period and the generally sluggish retail environment experienced during the holiday season combined to put downward pressure on our gross profit. We believe it is important to continue to drive sales and grow our market share, and remain committed to our customers to deliver outstanding values and excellent customer service.”
Harris Teeter plans to spend about $219 million in capital expenditures for fiscal 2013. During the remainder of the fiscal year, the company intends to open nine new stores (including two replacements) and completely remodel eight stores (three of which will be expanded in size). The rest of the fiscal 2013 store openings are expected to include two in the third quarter (one of which is a replacement for a store closed in fiscal 2012) and seven in the fourth quarter. Additionally, the company anticipates reopening a flood-damaged store in the Washington, D.C., market.
With management still cautious in the current economic environment, Harris Teeter said it would “continue to refine its merchandising strategies to respond to the changing shopping demands.”