CARTERET, N.J. -- Pathmark Stores here said last week it believes the initiatives it is pursuing will help insulate it from competitive pressures.
Jim Donald, chairman, president and chief executive officer, said Pathmark is starting to see some momentum on the top and bottom lines from the "next-level initiatives" it's been following for the past few months -- "initiatives that differentiate us from the competition and go to the basics of why customers choose to shop at a supermarket," he explained.
Those initiatives, he said, include improved service; stringent sanitation and cleanliness programs; a renewed emphasis on produce; and a stronger emphasis on private brands, "though we plan to maintain a balance with national brands, since customers recognize us as a brand-driven retailer."
Donald and Frank Vitrano, executive vice president and chief financial officer spoke with analysts in a conference call to discuss financial results for the year and fourth quarter ended Feb. 2.
Sales for the year rose 3.2% to $4 billion, including a 53rd week in fiscal 2000, and 5.1% excluding that week, the company said, while comparable-store sales increased 2.5%.
For the 13-week quarter, sales fell 5.1% to $1 billion with a 14th week included and rose 1.9% excluding the extra week, while comps increased 0.3% for the quarter. The company said it was the fifth consecutive year of positive same-store sales and the 2.5% year-end increase was the best same-store sales performance since 1987.
Pathmark reported net losses for the year and fourth quarter. However, excluding reorganization costs, net income rose 30.7% for the year to $26.8 million, or 87 cents per share, and fell 18.4% for the quarter to $11.1 million, or 36 cents per share.
Earnings before interest, taxes, depreciation and amortization fell 2.1% to $189.2 million for the year and 6% to $54.6 million for the quarter.
Vitrano said Pathmark spent $130 million on capital expenditures last year, compared with $67 million in 2000, with plans to spend $135 million this year to open six new stores and complete 19 major renovations, in addition to supporting the installation of the new POS and self-checkout systems.
According to Vitrano, the company is awaiting results of a pending vote by creditors of Big V Supermarkets, Florida, N.Y., on whether to accept buyout offers from either Wakefern Food Corp., Elizabeth, N.J., or Stop & Shop Supermarkets, Quincy, Mass. If the Stop & Shop offer is accepted, Vitrano said Pathmark has agreed to acquire nine of the 26 Big V stores from Stop & Shop at a cost of $71 million plus inventory. A determination of which offer is accepted will probably not be known until June, he said.
Vitrano said Pathmark's financial expectations for the first quarter include flat same-store sales, earnings per share of 13 cents to 17 cents, and EBITDA of $43 million to $47 million. For fiscal 2002, he said the company anticipates a same-store sales increase of 1.5% to 2%, earnings per share of $1to $1.05 and EBITDA of $203 million to $208 million.