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Industry Profit Margins Up on Cost Controls: FMI

Food retailers overcame sharp increases in energy, health care and other costs to post a median after-tax net profit of 1.91% in fiscal year 2006-2007, up from 1.46% the previous year, according to Food Marketing Institute’s Annual Financial Review 2006-2007, released yesterday.

ARLINGTON, Va. — Food retailers overcame sharp increases in energy, health care and other costs to post a median after-tax net profit of 1.91% in fiscal year 2006-2007, up from 1.46% the previous year, according to Food Marketing Institute’s Annual Financial Review 2006-2007, released yesterday. The report, based on data from 109 companies representing 12,852 stores, showed that the smallest and largest companies reported strong bottom-line results. Retailers with annual sales under $100 million had a median net profit of 1.83%, and those with sales of $1 billion or more showed profits of 1.93%. Midsize retailers with sales in between did not fare as well, with profits of 1.1%. The report also showed that EBITDA increased to 4.8%, up from 4.29%, the highest mark in four years. “Retailers are serving consumers with the right mix of products, keeping items in stock and controlling inventories,” Tim Hammonds, president and chief executive officer of FMI, said in a statement.

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