A&P SEES FARMER JACK TURNAROUND 'ON TARGET' 2004-05-17 (2)

MARK HAMSTRA

MONTVALE, N.J. -- A&P here said it is on track in its efforts to revive its Farmer Jack brand in Detroit.

The company last June began revamping the Farmer Jack chain with more emphasis on fresh departments and service, a new pricing strategy and a plan to close or convert underperforming stores.

"The customer response has been favorable and our results remain on target so far," said Christian Haub, chairman and chief executive officer, A&P, in a conference call with analysts discussing the company's results for the fiscal year ended Feb. 28. "I think we are encouraged with the top-line trends. I wouldn't say we're absolutely where we want it to be, but we are close enough that the business overall is on track."

The company also has converted 10 Farmer Jack stores in Detroit to the Food Basics price-impact format and was scheduled to convert three more in Toledo this month. Haub said the Food Basics concept, which has been successful in Canada, is boosting the company's bottom line in the U.S. as well.

A&P said its comparable-store sales were up 1.5% for the 13-week fourth quarter, including 1.2% in the United States and 2.7% in Canada. For the year, comps improved 0.9%, including 0.5% in the United States and 2% in Canada.

4th-QUARTER RESULTS

Qtr Ended: 2/28/04; 2/22/03

Sales: $2.7 billion; $2.4 billion*

Change: 14.1%

Comp-store: 1.5%

Net income: ($57.1 million); ($21 mil.)**

Inc/Share: ($1.48); (54 cents)

Year: 2003; 2002

Sales: $10.8 billion; $10.1 bil.*

Change: 7.1%

Comp-store: 0.9%

Net Income: ($145.6 million); ($193.5 mil.)

Inc/share: ($3.78); ($5.03)**

* Sales for the most recent quarter and year include one extra week. Comp-store sales have been adjusted to reflect comparable 12-week periods.

** Net income in the recent fourth quarter included a restructuring charge of $39 million. Excluding nonrecurring adjustments, income per share for 2003 was $3.02, vs. $2.34 in the preceding year.