Giant says profits fell by 6.2% in 3rd quarter But figures for sales were up 4.3% in period

November 22, 1995|By Alec Matthew Klein | Alec Matthew Klein,SUN STAFF

Giant Food Inc., the dominant supermarket chain in the region, reported yesterday that its third-quarter earnings dropped 6.2 percent as increased costs more than offset a gain in sales.

The Landover-based chain of 164 supermarkets generated $870.6 million in sales for the 12 weeks ended Nov. 4, up 4.3 percent from $834.8 million over the same period last year. Sales in stores open at least a year, a key gauge of performance because it factors out new stores, increased 2.4 percent.

Net income fell from $18.5 million to $17.4 million as earnings per share dropped 1 cent over the comparable quarter to 30 cents.

"Several factors contributed to Giant's not bringing more of its sales increase to the bottom line during the quarter," the company said in a statement. Cited were a union wage increase for store personnel effective in September and the cost of opening three new stores -- in Wilmington, Del., Cherry Hill, N.J., and Manassas, Va.

For the 36 weeks ended Nov. 4, overall sales increased 4.2 percent while same-store sales rose 2.2 percent. Net income for the period increased 6.8 percent to $57.3 million, compared with $53.6 million over the same period last year.

Earnings per share increased 7 cents to 97 cents. Last year's per share earnings included a 2-cent extraordinary gain from the sale of Giant's interest in an automatic teller machine operation, the company said.

The retailer plans to open a new store in Owings Mills on Nov. 29 and close a Baltimore store on Dec. 1. Stores are also planned to open soon in Bowie and Woodbridge, Va. By year's end, the company expects to begin construction on eight other stores, six as part of its northward expansion.

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