Spartan Stores Loses $57 Million in Quarter
GRAND RAPIDS, Mich.-Spartan Stores, Inc., which owns the Toledo area's Food Town supermarkets, said yesterday it lost $57 million in its latest fiscal quarter, the third consecutive period it suffered a loss.
Nearly all of the $57 million was a non-cash accounting loss, but it reflected the company's poor operating performance in metro Toledo, where it is pitted against determined competitors offering persistent discounting. With its 24 percent market share, Spartan is a distant second to Kroger in the Toledo market.
In its earnings report, the Michigan-based Spartan said its grocery operations in northwest Ohio and in nearby southeastern Michigan continue to perform below expectations. The company said it is evaluating options on what to do with Food Town, with a decision to be made by early April.
For the fiscal quarter, which ended Jan. 4, the grocery wholesale and retail company lost $2.87 a share, compared with a profit of $54,000, or a break-even position, in the same three months a year ago.
Sales for the quarter were $995 million, down 6 percent from the $1.1 billion in sales a year ago.
For the first three quarters of its fiscal year, Spartan has a loss of $101.4 million on sales of $2.6 billion, compared with a profit of $14.9 million on sales of $2.7 billion for the same period a year earlier.
Spartan's stock dropped 34 cents to close at $2.32 a share yesterday on the Nasdaq market.
The big loss in the latest quarter was nearly all devoted to a write-down of the value of its acquisitions, including Food Town, which it bought in 2000.
"It's an evaluation of assets compared to their market value a year ago," said Spartan spokesman Jeanne Norcross.
But there was good news for the company. It has exceeded its debt reduction goals for the current fiscal year, by paying $101 million back, leaving it with $185 million owed as of Jan. 4. That was accomplished selling seven shopping centers in Michgan and reducing inventory, the company said.
Spartan also made a strong commitment to battle competitors, and it did so by dropping prices on key items and by having more in-store promotions, including triple coupons, officials said. "It was designed to attract customers back to stores and it has worked," Ms. Norcross said. "Customer counts have been up [in the quarter]."
Nearly all of the $57 million was a non-cash accounting loss, but it reflected the company's poor operating performance in metro Toledo, where it is pitted against determined competitors offering persistent discounting. With its 24 percent market share, Spartan is a distant second to Kroger in the Toledo market.
In its earnings report, the Michigan-based Spartan said its grocery operations in northwest Ohio and in nearby southeastern Michigan continue to perform below expectations. The company said it is evaluating options on what to do with Food Town, with a decision to be made by early April.
For the fiscal quarter, which ended Jan. 4, the grocery wholesale and retail company lost $2.87 a share, compared with a profit of $54,000, or a break-even position, in the same three months a year ago.
Sales for the quarter were $995 million, down 6 percent from the $1.1 billion in sales a year ago.
For the first three quarters of its fiscal year, Spartan has a loss of $101.4 million on sales of $2.6 billion, compared with a profit of $14.9 million on sales of $2.7 billion for the same period a year earlier.
Spartan's stock dropped 34 cents to close at $2.32 a share yesterday on the Nasdaq market.
The big loss in the latest quarter was nearly all devoted to a write-down of the value of its acquisitions, including Food Town, which it bought in 2000.
"It's an evaluation of assets compared to their market value a year ago," said Spartan spokesman Jeanne Norcross.
But there was good news for the company. It has exceeded its debt reduction goals for the current fiscal year, by paying $101 million back, leaving it with $185 million owed as of Jan. 4. That was accomplished selling seven shopping centers in Michgan and reducing inventory, the company said.
Spartan also made a strong commitment to battle competitors, and it did so by dropping prices on key items and by having more in-store promotions, including triple coupons, officials said. "It was designed to attract customers back to stores and it has worked," Ms. Norcross said. "Customer counts have been up [in the quarter]."