LOS ANGELES -- Smart & Final here said last week a successful restructuring of its Florida food-service operation and targeted programs at its stores helped boost sales and earnings for the year and fourth quarter ended Dec. 31.
Sales for the year rose 4% to $1.9 billion and comparable sales rose 5.5%, while net income was up 133.7% to $11 million.
For the 12-week quarter, sales rose 4.6% to $434.2 million and comps were up 4.4%, while net income increased 88.2% to $3.1 million.
Store sales rose 5.9% for the year and 4.6% for the quarter, while food service distribution sales declined 2.7% for the year and 1.4% for the quarter -- which the company noted was an improvement over the prior year, when food-service sales fell more than 9% in both periods.
"Two-thirds of the way through the first quarter, food-service sales have experienced an upturn and are positive," Martin Lynch, executive vice president and chief financial officer, said last week in a conference call with financial analysts.
He said a similar restructuring that is under way at Smart & Final's Stockton, Calif., food-service operation is likely to produce positive results during the second half of the current year.
Ross Roeder, chairman and chief executive officer, said the company is investing in several targeted programs at its stores, including increasing market outlays to help build increased awareness of Smart & Final values; adding more in-store labor to deliver better customer service; and resuming performance-based incentive-compensation programs to attract and retain better employees.
Lynch said customer transactions were up 2.8% for the quarter and 3.2% for the year, with the average transaction size increasing to $38.05 for the year.
In other highlights of the conference call, Roeder said:
The 4.4% increase in same-store sales for the fourth quarter was notable, considering that fourth-quarter comparable sales increases of 20% a year ago were inflated by Y2K stockpiling.
The company plans to open 15 to 20 new stores this year, compared with four last year.
The potential downturn in the economy is not likely to have a negative impact on Smart & Final sales.
"Everyone has questions, but Smart & Final has always weathered economic downturns in a strong manner, so we have a fair amount of confidence going forward," Roeder said.
