Giant reports 8.3% increase in third-quarter earnings

November 20, 1996|By Liz Bowie | Liz Bowie,SUN STAFF

Giant Food Inc., the Landover-based supermarket chain that is expanding rapidly into the Northeast, reported its third-quarter earnings rose 8.3 percent over the same quarter a year ago.

The largest supermarket chain in the area said its earnings were $18.8 million, or 32 cents a share, for the 12 weeks ended Nov. 2 compared with $17.4 million, or 30 cents a share, for the same period the year before. Sales were $897 million, up 3 percent over last year's $871 million.

Though the earnings were below analysts' estimates of 36 cents a share, Pete Manos, chairman, president and chief executive officer, said the company was satisfied with the performance.

"Anytime you have an increase in the kind of economy we are having, we are very happy with the quarter," he said.

Manos said margins were squeezed by increased promotions and the expense of opening five new stores during the period: one in Eldersburg, one in Philadelphia and three in the Cherry Hill, N.J., area. Profits were 2.1 percent of sales, compared with 2.65 percent of sales for the second quarter of the year and 2.88 percent for the first quarter.

Giant has increased the number of stores it owns, with seven added in the past year, to 171 today.

The company said that while the new stores and increased promotions helped boost sales overall, sales at stores in operation at least a year -- an important measure of performance -- were down 0.48 percent. Manos attributed the decrease to so-called cannibalization -- the siphoning off of sales by new stores opened near existing ones. When that was factored out, he said, same-store sales would have risen 0.71 percent.

For the first three quarters, earnings were up 18.4 percent to $67.8 million, or $1.14 a share, compared with $57.3 million, or 97 cents a share, in 1995. Sales increased 2.7 percent, to $2.7 billion from $2.6 the previous year.

Giant shares closed at $35.375 yesterday, off 50 cents, prior to the earnings announcement.

Pub Date: 11/20/96

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