SAN BERNARDINO, Calif. — If inflation becomes an issue, Stater Bros. will decide whether to raise prices based on what competitors do, Jack Brown, chairman and chief executive officer, told investors last week.
“It will be a competitive call whether we pass some inflation through or not, but looking at the operating results of the three national companies we compete with [Kroger Co., Safeway and Supervalu/Albertsons], I don't think any of them are ready to reduce their profits.”
Brown made his remarks in a call to discuss financial results for the fiscal year that ended Sept. 26. For the year, net income fell 28% to $24.6 million and sales dropped 4.2% to $3.6 billion. Same-store sales fell 2.5%. Excluding the effect of the sale of Santee Dairies during the first quarter, sales fell 3.2%.
For the 13-week quarter, net income rose 19.3% to $5.9 million, while sales fell 5.3% to $897.4 million, and same-store sales fell 3.3%.
Phil Smith, executive vice president and chief financial officer, said comps through the first weeks of the first quarter are down 2.5%-3%.
Smith said gross profit margins rose to 27.82% of sales during the fourth quarter, compared with 25.99% in the year-ago quarter, “due to the end of a special produce pricing promotion that reduced produce margins.” For the year, gross profit margins rose slightly to 26.89% from 26.61%.