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DELCHAMPS NET FALLS 42% IN QUARTER

MOBILE, Ala. -- Delchamps here said new competition and a battle for market share led to "disappointing" earnings in the first quarter ended Oct. 1.ing changes. The accounting changes reduced last year's first-quarter net by $700,000.Sales in the 13-week quarter declined 0.1% to $266.2 million. Same-store sales fell 3.1%.Randy Delchamps, chairman, president and chief executive officer, said stepped-up

MOBILE, Ala. -- Delchamps here said new competition and a battle for market share led to "disappointing" earnings in the first quarter ended Oct. 1.

ing changes. The accounting changes reduced last year's first-quarter net by $700,000.

Sales in the 13-week quarter declined 0.1% to $266.2 million. Same-store sales fell 3.1%.

Randy Delchamps, chairman, president and chief executive officer, said stepped-up competition pressured the company's earnings in the quarter.

"First-quarter earnings were disappointing as the company faced continued entry of new competition in the marketplace," he said in a statement. "With more companies vying for a share of the same food dollar, Delchamps' focus continues to be an aggressive pursuit of market share, margin improvement and cost management.

"All aspects of the company's operations are being reviewed to provide better productivity and improved cost control and deliver sales and merchandising programs that will increase profitability."

As a result of the chain's attempt to maintain market share, gross margins fell 107 basis points in the quarter to 24.72% of sales. Delchamps' gross-margin rate was 25.79% of sales in last year's first quarter.

The chain reduced its selling, general and administrative expenses 3 basis points to 23.46% of sales in the quarter. Operating income fell 45.5% to $3.3 million, or 1.26% of sales. This compared with operating income of $6.1 million, or 2.3% of sales, in the year-ago first quarter.

Delchamps operates 120 supermarkets in Alabama, Florida, Louisiana and Mississippi and 12 liquor stores in Florida.

1st-QUARTER RESULTS

Qtr Ended 10/1/94 10/2/93

Sales $266.2 million $266.6 million

Change -0.1%

Same-store -3.1%

Net Income $1.5 million $2.5 million

Change -41.5%

Inc/Share 55 cents 95 cents