MILAN, Ill. -- Despite stepped up competition, Eagle Food Centers here avoided a major impact on sales and earnings by moving forward with merchandising and operations improvements, company officials said.
Although rival retailers opened 10 stores -- including four supercenters -- from late July to mid-October, Eagle's financial results for the third quarter and 39 weeks ended Nov. 2 were better than anticipated, Herb Dotterer, senior vice president and chief financial officer, told securities analysts during a conference call.
"We are pleased with the result we delivered in the third quarter. It exceeded our expectations," he said. "It was a pivotal quarter for us as we faced the 10 new competitive openings during the 90-day period. We were able to handle that reasonably well."
Sales for the quarter rose 0.8% to $248.3 million from $246.2 million a year ago. Year-to-date sales increased 1.8% to $754.1 million from $740.8 million. Same-store sales were up 0.5% for the 13-week quarter and 2.9% for the nine months.
Eagle reported a net earnings of $530,000 for the quarter vs. a net loss of $2.6 million a year earlier. Net income for the 39 weeks was $2.7 million vs. a net loss of $12.4 million in the comparable period.
New store openings pinched Eagle's sales -- particularly early in the quarter, when many grand openings were held, Eagle officials said. Dotterer said the company lost 3% to 4% of its total sales base during that time.
But Eagle, which operates 92 stores in Illinois, Iowa and Indiana, was able to offset a large hit by improving its product mix and customer cash-back program, upgrading its systems and communicating more frequently with store-level employees, said Bob Kelly, president and chief executive officer.