Dart Group's earnings plunge 72.5% during second quarter

September 15, 1992|By Michael Dresser | Michael Dresser,Staff Writer

Dart Group Corp., the retail and financial company controlled by the Haft family of Washington, reported that its earnings for the second quarter plunged 72.5 percent from the same period a year ago.

The plunge was not attributable to problems in the two companies Dart controls, Crown Books and Trak Auto. Trak Auto posted a healthy earnings gain, while the decline at Crown was too small to have had such a dramatic effect on Dart's earnings.

Besides its 53 percent share of Crown Books and 68 percent share of Trak Auto, Dart owns 50 percent of Shoppers Food Warehouse, a fast-growing grocery chain in the Washington area, and 100 percent of Dart Group Financial and Cabot-Morgan Real Estate Co. Dart, Crown and Trak Auto are all based in Landover.

Stanley Rubenstein, a spokesman for the three companies, said Friday that pressure on profit margins at Shoppers Food Warehouse was one likely reason for the earnings drop. The 33-store Shoppers chain has made dramatic gains in market share in Washington, but "that has been at the sacrifice of some profit margin," he said.

Mr. Rubenstein added that the Dart Group had also been hurt by low interest rates, which cut into its investment income, and by a weak real estate market.

In its statement, Dart Group reported income for the quarter which ended July 31 of $699,000, or 38 cents a share, down from $2.5 million, or $1.40 a share, during the same period last year. Revenue increased slightly, to $314.5 million from $307.7 million.

Dart said its income was affected by an extraordinary loss of $885,000 resulting from the early redemption of Dart's remaining debentures, offset partly by extraordinary gains of $497,000 from a tax loss carry-forward at Trak Auto and $1.4 million from settlement of insurance claims at Trak Auto.

Still, even before the extraordinary items were taken into account, Dart's earnings fell from $1.40 to 59 cents.

Dart Group's stock dropped $3 to $70 a share in trading yesterday.

Three months ended 7/31/92

.. .. .. .. .. Revenue .. .. Net .. .. .. .. Share

'92 .. .. 314,463,000 .. 699,000 .. .. .. 0.38

'91 .. .. 307,655,000.. 2,542,000 .. .. .. 1.40

% change .. .. +2.2 .. .. .. -72.5 .. .. .. -72.9

Six months ended 7/31/92

.. .. .. .. Revenue .. .. .. Net .. .. .. .. .. Share

'92 .. .. 614,876,000 ..3,124,000 .. .. .. .. 1.71

'91 .. .. 575,131,000 .. 1,988,000 .. .. .. .. 1.09

% change .. .. +6.9 .. .. .. +57.1 .. .. .. .. +56.9

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