SALISBURY, N.C. -- Delhaize America here said last week sales and comparable-store sales rose in the second quarter ended June 17 although earnings declined, a situation the company attributed to price markdowns it instituted to build sales in a highly competitive environment.
. In this year's first quarter, sales increased only 3% and comp-store sales declined 1.8%.
Despite improved sales, earnings for the quarter went down 13.5% to $59.2 million. The company said it introduced promotional campaigns at its Food Lion stores to improve sales in a competitive environment, but although sales did improve, related price markdowns caused gross margins to decline as well.
"We believe that this drop in gross margins is a temporary condition and that the longer term margin trend remains favorable," said Bill McCanless, Delhaize America's chief executive officer.
