Delhaize sees revenues slide in Q1
SALISBURY, N.C. — Delhaize America, the U.S. division of Delhaize Group, reported a decline in its underlying profit declined due to a decrease in gross margin resulting from price investments, as well as the impact of closed stores, as part of the company’s portfolio optimization.
Revenues for the first quarter slid 1.2% to $4.6 billion, the company said, noting that when excluding the impact from the 126 stores the company closed in February, total U.S. revenues instead increased 0.7%. Comparable-store sales evolution declined 0.6%, the company said.
Meanwhile, underlying operating profit decreased by 21.7% to $173 million. Underlying operating margin was 3.7%, compared with 4.7% in the year-ago period. Excluding its Bottom Dollar Food banner, underlying operating margin for Delhaize America was 4.3%.
At the end of March 2012, Delhaize Group operated 1,541 supermarkets in the United States, a decrease of 94 stores, compared with March 2011, due to the closing of 126 stores earlier this year, partly offset by the expansion of Bottom Dollar Food, which Delhaize America said continued to experience strong revenue growth and that the Philadelphia and Pittsburgh markets "have generated revenues above [our] expectations." Delhaize America also noted that Food Lion’s brand repositioning is moving ahead with "accelerated momentum," as comparable store sales growth and volume growth were 2.9% and 1.8%, respectively, for its phase-one stores. Phase-two stores, which include 250 locations in Norfolk, Richmond, Roanoke and Lynchburg, Va., markets that launched in late March, also enjoyed significant increases in both sales and transactions. Phase-three of the banner’s brand repositioning, which consists of approximately 260 stores, will be launched on schedule by the end of the summer.
Commenting on the results, Delhaize Group CEO Pierre-Olivier Beckers said the company continues to deliver its New Game Plan and remains committed to price competitiveness, particularly for the company’s Food Lion banner, "with the progressive rollout of our brand repositioning."
“These actions and the current trading environment translated into lower underlying operating profit in the first quarter of 2012," Beckers said. "In order to fund our long-term growth initiatives and to further invest in our prices in several of our markets, particularly the U.S. and Belgium, we will increase our focus on the generation of free cash flow through a more disciplined approach to capital expenditures and improvements in working capital."
Rite Aid’s total, same-store sales increase in April
CAMP HILL, Pa. — Rite Aid reported a 2.9% increase in same-store sales for the month of April, the company said in a monthly sales report Thursday.
The boost included a 2.7% increase in front-end comps and a 3% increase in pharmacy comps, as well as a 3.8% increase in script count. Total drug store sales for the period, which ended Saturday, were nearly $2 billion, a 2.5% increase over the $1.95 billion reported in April 2011.
For the year so far, comps increased by 3.3%, including a 3.6% increase in front-end comps and a 3.1% increase in pharmacy comps, along with a 3.2% increase in script count. Total drug store sales for the eight-week period were about $4 billion, a 2.8% increase over the $3.9 billion reported last year.
The 4,658-store chain also announced that it would buy $405 million in 9.375% senior notes due 2015, which prompted Moody’s to raise the company’s credit rating from Caa2 to Caa1, according to published reports. The company announced in February a plan to refinance its debt by offering $481 million in 9.25% senior notes due 2020, using the proceeds to buy back its 8.625% senior notes due 2015.
Also on Thursday, the Jean Coutu Group, which owns nearly 20% of Rite Aid, announced its fourth-quarter and fiscal year 2012 results. For the fourth quarter, which ended March 3, the company had sales of C$737.2 million and profits of C$62 million, compared with C$659.8 million and C$46.5 million in fourth quarter 2011. For fiscal year 2012, the company had sales of C$2.73 billion and profits of C$230 million, compared with C$2.6 billion and C$182.6 million in fiscal year 2011.
Last month, Jean Coutu announced it had reduced its stake in Rite Aid by 24%, selling 56 million of its 234.4 million shares and reducing the number of representatives on Rite Aid’s board from three to two.
Miracle-Gro introduces Expand ‘n Gro Organic planting mix
MARYSVILLE, Ohio — Miracle-Gro has launched an organic gardening product in select markets.
Expand ‘n Gro Organic planting mix can be used both in ground and in pots. When used in ground, Expand ‘n Gro works as a soil amendment, improving soil structure and also helps in-ground plants grow up to three times larger, as compared with planting in native soil alone.
"Expand ‘n Gro Organic is an innovative, expandable planting mix that is easy-to-use and enriches soil. Every gardener can significantly increase in-ground and container gardening results with Expand ‘n Gro. Incorporating it helps where soils are heavy clays or sands that are difficult to keep right balance between moisture and air in soil," Miracle-Gro marketing director Amy Gath said.
Miracle-Gro Expand ‘n Gro organic planting mix is available in major retailers throughout Albuquerque, N.M., and Colorado Springs and Denver, Colo., as a 0.67 cubic ft. bag (that expands up to three times, to make 2 cubic ft. of soil) at a suggested retail price of $15.99.