SALISBURY, N.C. -- Food Lion here said same-store sales and net margin continued to improve during the second quarter and first half of the fiscal year ended June 17. Net income rose 11.3% for the 12-week quarter to $38.7 million and 15.8% for the 24 weeks to $76.4 million. Sales increased 4% for the quarter to $1.9 billion and 3.7% for the half to $3.8 billion, while same-store sales rose 2.4% for the quarter and 3.4% for the half. Net margin for the quarter rose to 2.04%. Tom Smith, chairman, president and chief executive officer of Food Lion, said the quarterly rise in same-store sales and net margin both exceeded the industry average. Ed Comeau, a securities analyst with Lehman Bros., New York, said the chain's same-store sales recovery, which began 18 months ago, continued during the quarter, although the rate of growth slowed. He said the company indicated that its same-store sales are running ahead in the 2% range for the current quarter. Food Lion operates 1,046 stores in 14 states. During the quarter, the company opened five new stores, for a total of eight for the year, and completed 31 remodelings, for a total of 41 for the year. The company said it plans to open 50 new stores this year -- including 16 replacement units -- and also, to complete 120 remodels. Food Lion also said that, as of June 27, it had spent $8.49 million for the purchase of Class A and Class B shares as part of its program to repurchase up to $100 million worth of its stock. It said it purchased 841,500 shares of Class A stock at an average price of $6.15 per share and 529,000 shares of Class B stock at an average price of $6.27 per share. The company said it may make additional purchases in the open market through April 1996.
