WEST PALM BEACH, Fla. -- Pathmark Stores does not anticipate a pickup in the economy during 2004, Frank Vitrano, president and chief financial officer of the Carteret, N.J.-based chain, told an investors conference here.
"There's been a lot of discussion about a recovering economy, but we haven't seen any changes in consumer behavior, and therefore we anticipate the economic environment will remain unchanged [in 2004]," Vitrano told the Consumer and Industrial Growth Conference 2004, sponsored here last month by Wachovia Securities.
He said Pathmark expects same-store sales to rise 50 to 150 basis points in 2004, and earnings per share to reach 53 cents to 60 cents.
The company will allocate $95 million to capital expenditures in 2004, including $15 million for technology investments, with plans to open two new stores and complete 20 renovations. The "ultimate goal," Vitrano said, is to have 90% of its stores new or remodeled over a five-year period, up from 84% at the end of 2003 and 82% at the end of 2002.
Vitrano said renovations cost $1.8 million to $2 million per store and generally produce an average sales increase of 6%. "In terms of profitability, we expect a 13% return on investment after taxes, though our average over the last four years has been 11%," he said.
Citing some of the company's metrics, Vitrano said Pathmark's 143 stores average $28 million per unit in annual sales, compared with a peer average of $15 million; sales per square foot of $729; sales per labor hour exceeding $130; inventory turns of 14-plus per year; and 2.4 million customers a week.