MILAN, Ill. -- Eagle Food Centers here said last week a voluntary severance program at some Chicago-area stores contributed to a $6.3 million loss in the second quarter ended July 30.
The loss in the recent second quarter included a $4.3 million after-tax charge, or about 39 cents per share, to cover the costs associated with the severance program for 600 retail clerks at the company's stores in the Chicago area.
Eagle said in a statement that management expects the severance costs should be offset in less than 12 months as a result of lower wage and benefit costs of new employees.
Last year's six-month results were impacted by an extraordinary charge of $4 million net of tax for early retirement of debt.
If the separation expense this year and the extraordinary charge in last year's six-month period are excluded, Eagle said operating earnings would have been a loss of 22 cents per share and earnings of 27 cents per share for the first half of 1994 and 1993, respectively.
A securities analyst who asked not to be named said Eagle's same-store sales trends improved slightly during the quarter, from negative 5% in May and most of June to the negative 3.8% reported. However, the analyst said, the improvements come against comparisons with weak performance in last year's second quarter as a result of the Midwest flooding.
Eagle operates 101 stores in northern and central Illinois, eastern Iowa and northwestern Indiana under the Eagle Country Markets, Eagle Country Warehouse, Eagle Food Centers and BOGO's Food Deals banners.