The Great Atlantic & Pacific Tea Co (A&P), one of the first supermarket chains in the US, has announced unaudited fiscal 2001 Q4 and annual results for the 12 and 52 weeks ended 23 February 2002.
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Sales for the Q4 were US$2.5bn, compared with US$2.6bn in fiscal 2000; comparable store sales increased 0.5% and earnings per share were US$.20, compared with a loss of US$.28 in fiscal 2000.
During the Q4, the Montvale, NJ-based firm recorded an extraordinary after tax charge of US$7.2m, US$.18/share, for the cost of repurchasing US$178m of its 7.70% Senior Notes and US$20m of its 7.75% Notes. Also included in A&P’s Q4 are pre-tax costs of US$28.6m (US$16.6m after tax, US$.42/share) relating to its asset disposition program, and a non-recurring pre-tax gain of US$60.6m (US$35.1m after tax, US$.89/share) from proceeds received as a result of the demutualization of The Prudential Insurance Company.
For the FY, sales were US$11bn, compared with US$10.6bn in fiscal 2000. Comparable store sales increased by 2.6%. Excluding charges from the asset disposition program and repurchase of debt, and the non-recurring gain, results for fiscal 2001 were a profit of US$.02/share, versus a loss of US$.65/share in fiscal 2000. Including the aforementioned items, results for the FY 2001 were a loss of US$2.18.
Christian Haub, chairman and CEO, said: “I am pleased with A&P’s solid progress in the Q4 and FY 2001, as we achieved operating profitability while again improving our sales and market share. Through improved operating fundamentals and cost control, we increased gross margins and lowered expense rates throughout the year.
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By GlobalData“We also realized benefits from our ongoing supply chain and business process initiative. In addition, we reduced net debt by US$234m over the course of the year from inventory reductions and asset management initiatives.”
Elizabeth R. Culligan, president and COO, added: “We acted decisively in FY 2001 to review and improve our store network in terms of overall quality and growth potential. That effort, and the initial results of ongoing programs to upgrade our operating disciplines and merchandising execution, were major factors in our performance improvement.”
On 14 November 2001, A&P announced a program to improve operating results by disposing of underperforming assets which included 39 stores. As a result of this program, it expects to incur costs and accrue charges totaling in the range of US$115-125m after tax, in order to write down fixed assets, close stores, incur restructuring costs, and accrue for future occupancy expenses. About US$100m of the costs will be non-cash or deferred payout. During the Q4 and FY 2001, A&P incurred after tax charges of US$16.6m, US$.42/share, and US$112.3m, US$2.88/share, respectively. A&P expects to incur the majority of the remaining costs in the first two quarters of fiscal 2002.
Early in fiscal 2000, A&P announced a multi-year project of strategic initiatives to improve its supply chain and business systems and processes. For the Q4 and FY 2001, the cost associated with these initiatives was US$.30 and US$1.46 per share, respectively.
Haub concluded: “With five consecutive quarters of improved operating results, A&P’s turnaround is well underway. I thank all of our associates for their dedication and hard work in support of our objectives. We remain focused on the key strategies that generated our momentum in fiscal 2001, and are poised to drive our improvement to the next level in the year ahead.”
