US retailer Tops Holding Corp. has reported an increase in profits for 2011 due to the benefits from its acquisition of local peer Penn Traffic a year earlier.
Tops, the parent company of US chain Tops Markets, booked operating income of $68.8m for 2011, up from $10.6m last year.
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It said today (30 March) that its profits were boosted “primarily on operating leverage from the acquired Penn Traffic stores”.
CFO Rick Mills put the increase down to the company’s “ability to successfully integrate Penn Traffic into the Tops business model while effectively maintaining cost discipline and implementing operating efficiencies throughout our organisation”.
The company made a net income of US$5.8m compared to a net loss of $27m in 2010. The loss a year earlier came despite the results including a benefit of $15.7m from the purchase of the Penn Traffic stores, in addition to a $9m income tax benefit.
Full-year net sales were up 4.3% to $2.36bn thanks to a 1.4% increase in same-store sales, contribution from new outlets and the operation of the acquired Penn Traffic stores for four extra weeks.
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By GlobalData“We demonstrated in 2011 that we have the team in place fully capable of executing our strategy,” president and CEO Frank Curci said. “Our results capitalise on the strength of our brand and our ability to grow through innovative merchandising and marketing while maintaining disciplined cost management. The successful integration of the acquired Penn Traffic stores under the Tops banner and those newly renovated stores have resulted in an increase in foot traffic.”
