QUINCY, Mass. -- Stop & Shop Cos. here said it will slow its projected pace of new superstore openings this year due to its recent acquisition of Purity Supreme, North Billerica, Mass.
The 130-store company also reported a 21% increase in earnings and a 4.7% increase in sales for the first quarter ended May 20.
As reported, Stop & Shop agreed last month to purchase Purity for an estimated $255 million. The Purity chain includes 55 supermarkets and 66 franchised convenience stores in New England. The sale is expected to close later this summer.
As a result of the acquisition, the company has revised plans for new construction this year from 15 scheduled superstore units to between 10 and 12. The remainder will open in 1996, the company said. Charles Cerankosky, a securities analyst with Hancock Institutional Equity Services, Cleveland, said the company's decision to scale back growth was a sound one. "With that big of an acquisition, it makes sense to slow down new store development -- especially when you're entering new markets." (The company announced plans to expand into Long Island, N.Y., and northern New Jersey, earlier this year.)
"This allows management to concentrate on assimilating Purity Supreme, which is not a small undertaking," Cerankosky said.
Net earnings for the first quarter were $26 million. Sales for the 16-week period were $1.19 billion. Comparable store sales increased 0.3% over the prior year.
During the quarter, the company opened six stores under the superstore format. Stop & Shop replaced conventional stores in Providence, North Providence and Cranston, R.I., and opened new superstores in Abington and Mansfield, Mass. Earlier this month, after the close of the quarter, a new superstore was opened in Brockton, Mass.