ANCHORAGE, Alaska -- Carr Gottstein Foods here, which has agreed to merge with Safeway, said discontinuing a food-service business last year had a negative impact on sales and earnings for the second quarter and first half ended June 28.
The company said sales fell 1.2% to $150.2 million for the 13-week quarter and 1.0% to $285.3 million for the half, while comparable sales rose 1% for the quarter and 0.2% for the half.
Excluding 1997 sales attributable to YES Foods, Carr Gottstein said sales improved 2.6% to $3.9 million for the quarter.
Net income was $682,000 for the quarter and $48,000 for the half, compared with losses in both periods a year ago.
Excluding a one time pre-tax change of $8.9 million in last year's second quarter for discontinued businesses, the company said net income rose 2.9% to $700,000 for the quarter, compared with $200,000 a year ago.
Operating cash flow increased 9.5% to $12.2 million, or 8.1% of sales, for the quarter and 9.6% to $22.2 million, or 7.8% of sales, for the half. The company said it attributed the increase to improvements in gross margin dollars, combined with effective expense control during the quarter.
According to Lawrence H. Hayward, president and chief executive officer, "We are pleased with our improving sales trends and by our continued improvements in operating cash flow versus the prior year.
"This was our seventh quarter running in which we have shown operating cash flow improvement over the prior year. This remains consistent with our corporate priority to improve the productivity of our existing company assets through effective management of our margin and expense lines."
During the quarter Carr Gottstein completed its acquisition of certain assets of two Market Basket stores in Fairbanks and North Pole, Alaska; it also completed two remodels and had a grand reopening at two other locations.
The company said its capital investment program continued as planned, with total capital spending for the quarter of $5.3 million. Total capital spending for the year is expected to range between $8 million and $10 million, the company said.