HARRISBURG, Pa. -- Super Rite Corp. here reported that earnings increased by nearly 50% during the first quarter ended May 28.
For the quarter, income jumped to $3 million, or 32 cents per share, compared with $2 million, or 21 cents, a year earlier.
The company attributed the improvement to the performance of its wholesale operation and Metro superstores. In the wholesale arena, the addition of a new account and expanded sales to established customers leveraged increased revenue against fixed expenses. In the retail area, earnings showed continued positive results due to successful operating profits in the Metro superstores , which reflected improved gross margins and better expense controls.
Total revenues for the 13-week period rose 12.5% to $351.1 million from $312.1 million a year ago. Super Rite's wholesale division generated sales of $325.4 million during the first quarter, up 11.9% from $290.7 million in fiscal 1993.
"Super Rite's customers are adding eight to 10 stores per year," said Ken Bann, a securities analyst with Bear Stearns, New York. "Plus they have one of the most efficient warehouse operations in the business, so when you add revenue, it can have a dramatic effect on earnings."
Retail sales climbed 13.2% to $72.5 million, from $64.0 million last year. Much of this growth was spurred by the Metro superstores, the company said, where same-store sales gained 12.2%.
"The superstore is a concept that hasn't really been introduced in the Baltimore market," Bann said. "As a result, they're picking up a lot of market share."
The company opened two Metro stores during the most recent fiscal period and plans on adding a third superstore in the later part of the second quarter.