LOS ANGELES -- Smart & Final here said it will have to be "adaptable and flexible" this year to deal with the uncertainties posed by the economy.
However, Ross Roeder, chairman and chief executive officer, said he is optimistic that his company will do well.
Speaking with securities analysts in a conference call following the release of the company's first-quarter financial results, Roeder said he is not daunted by the bleak outlook of some industry segments.
"This is a difficult year to forecast because of the terrific uncertainty of everything," Roeder said. "We're seeing more uncertainty this year than I've ever seen, so we must be adaptable and flexible. But we're still confident this will be a good year for us."
Asked if the company has been affected by the economic downturn, Roeder said, "It's a little early to tell. We've seen some softening as we've moved into the second quarter, but it's hard to attribute that to the economy, because holidays and other factors fell differently. But we're certainly watching it carefully."
Roeder said his optimism for the balance of the year comes in part from the company's strong financial results in the first quarter ended March 25, which showed, as previously reported, sales up 6.2% to $424.2 million; net income rising 36.8% to $870 million; comp store sales up 6.4%, and food-service distribution sales up 3.9%, including a 15.4% increase in Florida following a restructuring there and a 9.9% decline in northern California, where a restructuring is under way.
Martin Lynch, executive vice president and chief financial officer, said Smart & Final has historically done well in weak economies. "Our business customers tend to fare better in recessions than white-table restaurants, and consumers see us as a value, so they shop at our stores more often in tight times," he said.
When analysts pointed out that retailers in general and Costco in particular were lowering their financial expectations for the year, Roeder replied, "We operate with a different economic model than Costco, though we're not going to say everything is fine in California. We can't tell at this stage what will happen there, though we know utility rates will increase."
