Pathmark Sees Sluggish Sales in First Quarter

CARTERET, N.J. - Pathmark Stores Inc. today said sales for its 13-week first quarter ended May 4, 2002, were $976.8 million compared to $977.2 million in the prior year period. The flat sales were due to lower same-store sales of 1.2 percent and two closed stores, partially offset by new stores, the company said.

Net earnings for the first quarter were $2.8 million or $0.09 per diluted share, compared to the prior year's first quarter, when there was a net loss of $61.4 million or $2.05 per diluted share. Excluding the amortization of goodwill in the first quarter of fiscal 2001, net earnings were $5.0 million or $0.16 per diluted share. EBITDA for the first quarter of fiscal 2002 was $42.0 million compared to $45.2 million in the prior year's first quarter. The quarter's results were impacted by a one-time charge relating to a labor buyout, which caused reductions of $2.0 million to EBITDA, $1.2 million to net earnings, and $0.04 to earnings per diluted share.

"Sales were sluggish in our first quarter, and this disappointing trend continues into the current quarter," said Jim Donald, chairman, president and CEO. "The benefits from our 'next level initiatives' partially offset the impact of the sales weakness. Despite the sales shortfall, we maintained our market share in the quarter and anticipate seeing an improved sales performance during the second half of the year."

Pathmark opened one new store and renovated five stores in the first quarter and expects to open an additional five new stores, two of which are replacement stores, and complete an additional eight store renovations during the remainder of the year. Donald said the company is pleased with the sales results and initial consumer response to its recent new stores.
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