SHEBOYGAN, Wis. -- Fresh Brands here said last week it would not comment on published reports that it was about to conclude a deal with A&P, Montvale, N.J., to acquire all or some of A&P's 23 Milwaukee-area Kohl's Foods Stores.
During a conference call to discuss results for the second quarter ended July 12, Elwood Winn, Fresh Brands' president and chief executive officer, replied to a question about a possible Kohl's takeover by saying, "We won't comment on rumors in the marketplace until or unless we have a definitive agreement."
However, earlier in the call he said, "We continue to evaluate expansion and acquisition opportunities. We are in a solid position to pursue acquisition opportunities as they arise."
A&P also declined to comment on the possible sale of the Kohl's Milwaukee stores to Fresh Brands.
A&P had previously announced that it will begin closing the stores in mid-August, and last month it listed them as discontinued operations in its first-quarter financial statement.
In its 12-week first quarter, Fresh Brands' comparable-store sales declined 0.7%. Winn attributed this to the weak economy and to competitive store openings. He said four supercenters operated by Wal-Mart Stores, Bentonville, Ark., had opened in Fresh Brands' market area, with another one scheduled to open this summer and a sixth scheduled to debut in the fall.
The company also noted that it had a $850,000 charge in the quarter primarily related to franchise receivables, including the receivables of a franchise store that closed in the quarter.
"We are paying close attention to franchise stores that experience difficulties," Winn said.
In the quarter, sales rose 3.6% to $152.2 million, net income declined 13.7% to $1.6 million, and earnings per share were 33 cents, compared with 36 cents in the previous year's second quarter.
In the 28-week half, sales increased 2.7% to $339.8 million, net income was down 6.5% to $3.6 million, and earnings per share were 70 cents, compared with 73 cents in last year's first half.
