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Ruddick Corp. Reports Higher Net Income in Fourth Quarter

CHARLOTTE, N.C. - Ruddick Corporation, which operates the Harris Teeter supermarket chain and a smaller industrial thread manufacturing unit, on Tuesday reported that sales for the fourth quarter of the fiscal year ended September 30, 2001 decreased by 7.0% to $627.6 million compared to the fourth quarter of fiscal year 2000. Consolidated sales increased by 1.9% to $2.74 billion.

The decline in sales during the quarter reflected the continuation of weak business conditions at American & Efird (A&E), the company's textile subsidiary, as well as the sale of 26 Harris Teeter retail grocery stores in non-core markets completed on July 9, 2001.

In the fourth fiscal quarter of 2001 Harris Teeter's sales decreased by 5.1% to $553.8 million as compared to the prior year quarter reflecting primarily the displaced sales of 26 divested stores partially offset by the growth in sales in new and existing stores. Harris Teeter's sales for the fiscal year 2001 grew by 3.6% to $2.42 billion. Comparable store sales increased by 2.53% in the fourth fiscal quarter of 2001 as compared to 1.15% in the fourth quarter of fiscal 2000 (excluding the divested stores). Comparable store sales for the fiscal year 2001 excluding the divested stores increased by 2.84% as compared to 1.28% in fiscal 2000.

Harris Teeter's operating profit of $21.4 million in the fourth quarter of fiscal 2001 increased 53.6% from $13.9 million in the fourth quarter of fiscal 2000. Harris Teeter's operating margin on sales improved to 3.86% in the fourth quarter of fiscal 2001 as compared to 2.38% in the comparable prior year period. Annual operating profit for fiscal 2001 before non-recurring charges grew by 29.9% to $76.8 million from $59.1 million in fiscal 2000. Operating margin on sales excluding non-recurring charges improved to 3.18% in fiscal 2001 from 2.54% in fiscal 2000.

Thomas W. Dickson, president of Ruddick, said, "We continue to be pleased with the improvement in operating profit and comparable stores sales growth at Harris Teeter. Significant improvements have been achieved in reducing waste and improving operating efficiencies. The comparable stores sales growth reflects effective merchandising programs in a very competitive environment. We believe the results for the quarter demonstrated the positive impact of the strategic sale of the 26 stores in non-core markets. We continue to believe that the sale of the stores will enable the company to concentrate on core markets which have a greater potential for return on investment over the long-term."

Harris Teeter opened eight new stores and one replacement store during the year and closed 28 stores, including the 26 discussed earlier. At 2001 year- end, 137 stores were in operation, compared to 156 at the end of fiscal 2000. Eleven new stores are planned for opening in fiscal 2002.
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