Dart Group has $467,000 net loss in 1st quarter Consolidated revenue for period rises 3.3% to $157.9 million

June 18, 1996|By Abbe Gluck | Abbe Gluck,SUN STAFF

Dart Group Corp. reported yesterday a first-quarter net loss of $467,000, or 36 cents a share.

The company posted net income of $913,000, or 31 cents per share, in the same quarter last year. The quarter ended April 30.

Dart Group's consolidated revenue for the quarter rose 3.3 percent, to $157.9 million, compared with $152.8 million in the first quarter of 1995.

The Landover-based company operates retail outlets in Maryland, Virginia, Washington, D.C., Illinois and California.

Dart Group owns 67 percent of Trak Auto, the discount auto-supply retailer, 51 percent of Crown Books, and 50 percent of Shoppers Food Warehouse, which operates 34 stores in the region. Total Beverage, which operates three beverage super-stores in Washington's Virginia suburbs, is Dart Group's subsidiary.

Crown Books, Trak Auto, and Total Beverage's sales increased 7.7 percent during the quarter, the company said.

Trak posted a 5.7-percent rise in net income for its first quarter, which ended May 4. It reported net income of about $1.18 million, compared with $1.12 million for the year-ago period.

Trak's gains were attributable to good winter weather, said Larry Schafran, director and chairman of Dart Group's executive committee.

"If it's cold, people are going to buy antifreeze and tires, but if there's too much snow on the ground, they can't do that."

Trak also expanded into larger so-called Super Trak and Super Trak Warehouse Stores, the company said. The auto-supply retailer operates 267 stores in Washington D.C., Baltimore, Richmond, Va., Chicago, San Diego and Los Angeles.

Crown Books said it lost $1.8 million for its first quarter ended May 4, compared with its year-earlier loss of about $400,000.

"They were too small, they weren't competitive," Schafran said. As a result, Crown is closing 37 of its Classical Crown Book stores and plans to open 30 Super Crown stores, which should increase the chain's profits, he said.

Total Beverage reported a net operating loss of $0.6 million for the quarter.

Schafran said the beverage company needs "two or three more stores in the area." With more stores, the subsidiary could manage its advertising more efficiently, he said.

During the quarter, Total Beverage closed its Dale City, Va., store and said it planned to expand into other Washington, D.C., metropolitan areas.

Dart Group also posted an increase of $2.4 million in its equity in Shoppers Food Warehouse in the quarter.

Wall Street's response to the earnings reports was mixed. Shares of Dart Group rose $2.83 to $82; Trak's shares fell 25 cents to $16.375; and Crown's shares dropped 78 cents to $12.

Proceeds from the sale of Dart Group's subsidiary, Cabot-Morgan Real Estate co., could help the company next quarter.

Dart Group recently faced legal troubles that led to the May sale of its Cabot-Morgan properties.

In September 1994, a judge in Wilmington, Del., ordered Dart Group to pay $34 million to Robert Haft, its former president. The court ruled that Dart Group breached Haft's employment contract when Herbert Haft, the group's founder and Robert's father, fired him.

Last month, the company lost its third appeal in the case. Selling the Cabot-Morgan properties averted a possible liquidity crunch, the company said yesterday.

Dart Group sold the properties May 22, after the first quarter had ended, Schafran said, so the $13.9 in proceeds from the sale will contribute to second quarter operations. He said Dart Group is still appealing the decision.

Pub Date: 6/18/96

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.