Pricing, New Stores Help Publix ‘Comp the Comp’ in Q2

New stores and rising prices helped Publix Super Markets grow sales and comps in its fiscal second quarter, despite lapping massive gains in those same metrics a year ago due to the COVID pandemic. The chain however experienced fewer volume benefits like shrink reduction, sending gross margins and quarterly net profits down.

The Lakeland, Fla.-based chain said total revenues for the three-month period ended June 26 totaled $11.9 billion, a 3.9% increase from last year’s second quarter. Comp sales in the period increased by 2.3% due primarliy to increased product costs, the company said. Sales in last year’s second quarter increased by nearly 22% and comps soared by nearly 20%.

“Throughout the pandemic, our associates have continued to provide legendary customer service,” Publix CEO Todd Jones said in a statment. “I’m so thankful to serve alongside them in making shopping at Publix a pleasure.”

Gross profit as a percentage of sales was 28% in the quarter, compared to 28.4% in 2020’s second quarter. The decrease in gross profit as a percentage of sales was primarily due to a decrease in the impact of the coronavirus pandemic on shrink and volume-driven efficiencies in 2021 as compared with 2020. Operating profit as a percent of sales also dipped slightly to 9.4% from 9.5% in last year’s period, due mainly to the gross profit decline.

Operating and administrative expenses as a percentage of sales were 19.5% down from 19.6, due to a decrease in facility costs as a percentage of sales, partially offset by an increase in payroll costs as a percentage of sales, the company said.

Net earnings of $1 billion in the period decreased by 26.2% from $1.4 billion last year. Excluding the impact of net unrealized gains on equity securities in 2021 and 2020, net earnings would have been $920.3 million, compared to $978.3 million in 2020, a decrease of 5.9%. Earnings per share of $1.46 in the quarter, down from $1.94 last year, would have been $1.33 per share, compared to $1.39 per share in 2020.

Effective Aug. 1, Publix’s stock price increased from $61.30 per share to $63.10 per share. Publix stock is not publicly traded and is made available for sale only to current Publix associates and members of its board of directors.

Publix, the largest employee-owned company in the U.S. with more than 225,000 associates, currently operates 1,273 stores in Florida, Georgia, Alabama, Tennessee, South Carolina, North Carolina and Virginia. It has opened 16 new stores and remodeled 84 stores, over the six months ended June 26.