Giant keeps putting up good numbers Net income grew 8.5% in '95 to $102 million

Food industry

March 27, 1996|By Alec Matthew Klein | Alec Matthew Klein,SUN STAFF

Giant Food Inc., the region's dominant and still-growing supermarket chain, reported robust gains for the fourth quarter and fiscal year yesterday, showing no signs of a slowdown since the death of Giant Chairman Israel "Izzy" Cohen in late November.

For the 52 weeks ended Feb. 24, the Landover-based retailer said its net income increased 8.5 percent to $102.15 million, or $1.72 per share, compared with $94.16 million, or $1.59 per share, over the previous year. Annual sales rose to $3.86 billion, up 4.5 percent over last year's $3.69 billion. And sales in stores open at least a year, a key measure of performance, picked up 2.3 percent.

The numbers would have looked even better, excluding Giant's gain last year -- about 2 cents per share -- from the sale of its interest in an automatic teller machine operation.

"Izzy was able to put in place a plan for his succession that was extremely effective," said David Callahan, editor of Food World, a Columbia-based regional trade newspaper.

"The company was able to keep rolling right along, and the management team he assembled to succeed him is doing an out- standing job," Mr. Callahan said.

The ingredients for Giant's unabated success seem sublimely simple, according to analysts: Efficient management, effective sales promotions and nice presentation in its 166 stores, including 42 in the Baltimore metropolitan area.

Not even this winter's blizzard spoiled Giant's ascent. Indeed, the snow helped, the company said, as customers practically emptied the shelves, including huge quantities of goods not on sale, which boosted the grocer's profit margin.

For the fourth quarter, Giant's net income jumped 10.7 percent to $44.86 million, or 75 cents per share, compared with $40.51 million, or 69 cents per share, over the same period last year.

The company generated $1.26 billion in sales for the 16 weeks, up 4.9 percent over the comparable period last year. And sales in stores open at least a year increased 2.5 percent.

"We're excited about our numbers, and I think we have every reason to be excited about them," said David B. Sykes, Giant's senior vice president of finance.

"We have the best merchants, the best people, the best physical facilities and the best programs."

Yet Mr. Sykes added, "There's no complacency whatsoever. We have to earn our keep every day."

To that end, Giant is pushing north to gain new customers.

Over the past fiscal year, the retailer opened stores in Delaware and New Jersey, and plans to open six more this year in what it calls the "Northern territory," which also includes Pennsylvania. Stores are also slated to open in Eldersburg, in Carroll County, and Alexandria, Va.

Meanwhile, the company is trying to forge better ties with its established customers: Recently, Giant became the first supermarket chain in the mid-Atlantic region to offer its own Visa card.

Giant Class A shares closed yesterday at $33 per share, down 25 cents.

Pub Date: 3/27/96

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