CHARLOTTE — The stock in Ruddick Corp. surged nearly 10% at the opening of the markets Friday as the company posted an 8.5% increase in sales for the first fiscal quarter, driven in part by successful pricing and promotional strategies, the company said.
The company, parent of the Harris Teeter chain, said net income totaled $13.7 million, a decline of 64%, after recording a loss of $12.1 million from discontinued operations. Ruddick sold its American & Efird industrial-thread subsidiary in November 2011.
Earnings from continuing operations totaled $25.8 million in the most recent quarter, on sales of $1.12 billion. The sales gain was driven by comparable-store sales of 5.33% and a net addition of five new stores since the first quarter of a year ago.
"We are very pleased with our results for the quarter," said Thomas W. Dickson, chairman, president and chief executive officer of Ruddick. "Our pricing and promotional strategies were effective in driving unit sales, customer visits and increasing market share."
However, he said the strategies pressured profit margins in the quarter — effectively offset by reductions in the company's selling, general and administrative expense margins.
Operating profit for Harris Teeter increased by 8.8% to $48.8 million, or 4.36% of sales, in the first quarter of fiscal 2012, vs. 4.35% of sales in the first quarter of fiscal 2011.
Karen Short, a New York-based analyst with BMO Capital Markets, said operating profits came in slightly below expectations, but sales growth exceeded her expectations.
"Traffic, basket and units were all up," she said in a research note. "Higher-end categories, including seafood, floral, deli, bakery, fresh [and] organics all showed strength — a reflection of the bifurcated recovery."