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Pathmark Woes Sink A&P’s Q4

Falling sales and store traffic in its newly acquired Pathmark division contributed to a quarterly loss of $111.1 million for A&P, the retailer here said Tuesday. The losses far exceeded analyst estimates and sent stock in the company tumbling by more than 37%.

MONTVALE, N.J. — Falling sales and store traffic in its newly acquired Pathmark division contributed to a quarterly loss of $111.1 million for A&P, the retailer here said Tuesday. The losses far exceeded analyst estimates and sent stock in the company tumbling by more than 37%.

Officials in a conference call Tuesday said that prices at Pathmark had drifted out of line with its perception, and that business fell as A&P held back advertising while it worked to establish a strategic repositioning of the chain. The company said that work was complete by the end of the fourth quarter and fiscal year that ended Feb. 28, but acknowledged structural issues, including high costs and shrink, still need to be addressed at the chain, and predicted improvements would come slowly.

A&P’s Fresh, Food Basics and Gourmet divisions posted better results in the 13-week quarter, which saw overall sales of $2.3 billion increase 4.5% from the 12-week quarter a year ago, and comparable-store sales decrease by 1.8%.

For the 53-week fiscal year, A&P posted a loss of $139.9 million vs. a loss of $160.7 million in the 52-week prior year. Sales for the most recent year totaled $9.5 billion. A&P said it would focus this fiscal year to covert stores to appropriate formats; work to improve private label penetration; and reduce costs through supply chain and labor and productivity initiatives.

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