LOS ANGELES -- Smart & Final here reported a first-quarter sales increase of 19.4%, boosted by an estimated $40 million in sales coming as a result of the Southern California labor dispute.
"It's hard to imagine a better start to 2004 than the quarter we just announced," Ross Roeder, chairman and chief executive officer, said in a conference call with analysts. Comparable-store sales during the 12-week quarter ended March 21 increased by 18.9%, the company said. Excluding the impact of the labor action, which affected competitors Albertsons, Vons and Ralphs and ended on March 3, same-store sales increased by 7.2%, Roeder said.
Income from continuing operations of $6.6 million increased by 141% from $2.7 million reported in the first quarter of 2003. Net income of $6.2 million and income per share of 20 cents represented "our best first quarter ever," Roeder said. Overall sales were $424.3 million, up 19.4% from a year ago.
Smart & Final gained some 200,000 new customers during the five-month strike-lockout, Roeder said, and retaining them is a major priority for the chain in 2004. According to Etienne Snollaerts, Smart & Final's president and incoming CEO, this effort includes using loyalty data and couponing targeting both its regular customers and new shoppers. Company officials declined to provide further details of the effort, citing competitive reasons, though Roeder said early results have been encouraging.
"The new customer reception has been marvelous," said Roeder, adding that the opportunity to serve new customers during the labor action was "a great gift" for Smart & Final. "It's given people a chance to come see us again and say, 'This isn't the same Smart & Final store I remember."'
Roeder said he anticipated same-store sales gains to remain in excess of 7% going forward, saying that overall trends among consumers and small-restaurant operators bode well for the chain. "There are not many trends in the grocery industry that do not support growth in our stores," said Roeder, citing bulk buying and Smart & Final's value proposition, among others. "These are things that did not evaporate with the end of the strike."
Smart & Final operates 230 non-membership warehouse stores serving consumers and food-service operators in six Western states and Mexico. Roeder said the company would begin to accelerate new store openings in 2005.