San Bernardino, Calif. — Efforts to keep prices down resulted in strong sales but flat earnings during the fiscal second quarter for Stater Bros. Holdings, the retailer here said.
Net income for the 13-week quarter that ended March 30 was $13.5 million, identical to net income a year ago, while sales rose 7% to $925.4 million and comparable-store sales climbed 3.7%, excluding shifts in the Christmas and Easter holidays. For the year to date, net income rose 4.3% to $24.3 million, with sales up 5.5% to $1.9 billion and comps up 3.5%, excluding the holiday shifts.
Comps were impacted by the timing of Christmas Day, which fell in this year's first quarter, compared with the second quarter in 2007; and Easter Sunday, which fell in the second quarter this year, compared with the third quarter in 2007. Christmas sales boosted comps by $9.2 million, and Easter increased comps $4 million.
Phil Smith, executive vice president and chief financial and administrative officer, said gross profit margins fell 111 basis points to $27.68% in the quarter and 95 basis points to 27.8% in the half “due to not passing on inflation in product costs and to investment of gross margin to increase sales.” He also said comp sales in the third quarter are similar to second-quarter levels.
Speaking with analysts last week, Jack Brown, chairman and chief executive officer, said Mother's Day sales were “a little softer” than Stater had expected, “which has a direct relationship to the economy.”
Brown said inflation is running a little over 2%, “and we think it will continue at that pace.”
|*REFLECTS SHIFTS OF CHRISTMAS AND EASTER HOLIDAYS.|