New Store Growth Fuels Harris Teeter's Q3 Sales

CHARLOTTE, N.C. -- Harris Teeter's sales were up 11.6 percent for the third quarter, the retailer's parent company, Ruddick Corp. said late last week. Operating profit at the regional supermarket chain increased 12.1 percent to $31.4 million.

Harris Teeter's sales increased 11.6 percent to $740.6 million, compared with sales of $663.3 million in the third quarter of fiscal 2005. For the 39 weeks ended July 2, 2006, sales rose 10.0 percent to $2.17 billion. The company attributed the increase in sales to new store activity and comparable-store sales increases of 3.16 percent for the third quarter, and 3.48 percent for the 39-week period.

Operating profit at Harris Teeter increased 12.1 percent to $31.4 million for the third quarter of fiscal 2006. Operating profit was reduced by $2.3 million (0.31 percent to sales) for required reserves and other costs associated with the closing of two existing Harris Teeter stores upon the opening of two former Winn-Dixie stores.

For the 39 weeks ended July 2, operating profit was $97.5 million, an increase of 12.4 percent from $86.7 million in the prior-year period.

Harris Teeter's operating profit and margin improvements were achieved primarily through the continued growth in total and comparable-store sales as a result of net new-store growth and effective retail pricing, product differentiation, and targeted promotional spending programs, according to Ruddick Corp. The sales gains, along with continued emphasis on cost controls, have provided the leverage to help offset incremental costs associated with Harris Teeter's new-store development program and increased store supply costs, bank card fees, and fuel costs.

Harris Teeter expects to open an additional five new stores during the fourth quarter, for a total of 16 new-store openings for fiscal 2006. The retailer plans to open 21 new stores within its existing markets during fiscal 2007.

Harris Teeter currently operates 149 stores in six Southeastern states.
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