Publix: Sales Up, Earnings Slide in Q3

Higher product costs helped drive a 6.3% increase in comparable-store sales for Lakeland, Fla.-based Publix in the company's third quarter of fiscal 2021. 

In an SEC filing on Monday, the employee-owned grocer reported that rising product costs were the primary factor in higher comps in both the three months ended Sept. 25, 2021 as well as the first nine months of this year. And in part because not all of those costs were passed on to consumers, gross profit as a percentage of sales slipped to 26.9% in the third quarter vs. 27.6% for the year-ago period. 

Net earnings, too, slipped during the quarter—down 6.6% vs. the year-ago period to $856.9 million—and earnings per share decreased to $1.24 from $1.31.

Publix's third-quarter increases in both comp sales and net sales (up 7.8%, to $11.9 billion, vs. the third quarter of 2020) represented an acceleration over the employee-owned grocer's second-quarter sales growth. In August, Publix reported that comp sales rose 2.3% and total sales rose 3.9% in the second quarter of fiscal 2021, as the company lapped sharp sales spikes seen in the early months of the COVID-19 pandemic. 

"As the effects of the pandemic and supply-chain challenges persist, the efforts of our associates continue to be extraordinary," Publix CEO Todd Jones said in a statement. "I couldn’t be more proud of their commitment to serving our customers and communities."

Publix stock, available to current employees and members of the privately held company's board of directors, saw a price climb of more than $3 per share, to $66.40 from $63.10, effective Nov. 1. Publix is the country's largest employee-owned grocer, with more than 225,000 associates on its payroll. 

For the first nine months of 2021, Publix opened 29 supermarkets, including six replacement stores, and completed 111 remodels. The company closed nine stores; five of those are expected to be replaced on site. Currently, Publix operates 1,284 stores in Florida, Georgia, Alabama, Tennessee, South Carolina, North Carolina and Virginia. In September, the grocer announced it would expand to its eighth state, opening in the Kroger and Walmart strongholds of Kentucky in 2023.