Earnings decline slows for Giant in 3rd quarter

November 25, 1992|By Michael Dresser | Michael Dresser,Staff Writer

WASHINGTON -- Giant Food Inc. reported its sixth straight quarter of lower earnings yesterday, but there might be some light at the end of the checkout lane.

The Landover-based grocery chain's profits in the third quarter fell 3 percent, to $13.8 million, or 23 cents a share, from $14.2 million, or 24 cents a share, in the same period last year. Gross margins dipped to 1.77 percent, compared with 1.84 percent in the third quarter of 1991.

Sales were up a minuscule 0.61 percent, to $778.5 million, at 158 stores, compared with last year's $773.8 million at 156 stores. Among stores that were open last year also, sales declined 1.17 percent.

While those numbers hardly compare with Giant's performance during the heady days of the 1980s, they represent a vast improvement from the previous five quarters, which brought profit declines ranging from 26 percent to 43 percent. In the second quarter, Giant's profits fell 37 percent as the company recorded its first decline in total sales in decades.

"We're quite optimistic about what happened this quarter," said David B. Sykes, senior vice president for finance. "If we have a little help from the economy, I think we would find ourselves doing better."

So far, Mr. Sykes said, it's been hard to spot any help coming. Despite recent reports suggesting the beginning of a rebound, Mr. Sykes said, "The economy hasn't turned up as far as I'm concerned."

Jeff Metzger, publisher of the Columbia-based trade journal Food World, agreed that whatever recovery might be starting hasn't reached the food business yet. Given the state of the economy and fierce competition in the region's grocery industry, he said, Giant did well.

Mr. Metzger said Giant's margins have especially been hurt by the decision in July 1991 to go to an "everyday low pricing" regimen for its health and beauty products. "You're cutting profit out of the bottom line. It's as simple as that," he said.

Three months ended 11/7.. .. .. .. .. ..Revenue.. .. .. .. .. ..Net.. .. .. .. .. ..Share

'92.. .. .. .. ..778,547,000.. .. .. ...13,758,000.. .. .. .0.23

'91.. .. .. .. ..773,843,000 .. .. .. ..14,201,000 .. .. ..0.24

% change.. .. .. .. ... +0.6.. ... .. .. .. ..-3.2.. .. .. ..-4.2

Nine months ended 11/7.. .. .. .. .. .. .. Revenue .. .. .. .. ..Net.. .. .. .. .. Share

'92.. .. .. .. .. ..2,360,153,000 .. ....44,818,000 .. ....0.78

'91 .. .. .. .. .. .2,338,111,000 .. .. ..62,521,000 .. ...1.10

% change .. .. .. .. .. .. .. +0.1 .. .. .. .. .-28.3.. .. .-28.6

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