BRUNO'S REPORTS RISE IN SALES AND EARNINGS

BIRMINGHAM, Ala. -- Bruno's here said sales, earnings and same-store sales improved in the first quarter ended Sept. 24.

iod of $9.2 million, which excludes a $3.3 million extraordinary charge. Net income increased 95.1%.

Per-share earnings totaled 15 cents, 1 cent above Wall Street's consensus estimate.

Sales rose 2% in the 12-week quarter to $653.6 million and same-store sales rose about 1%.

Ronald Bruno, chairman and chief executive officer, said the company is pleased its focus on existing stores has resulted in positive same-store sales despite continued competitive pressures. "With this improvement and stronger gross margins, we are optimistic about our future performance," he said in a statement.

Rick Church, a securities analyst at Smith Barney, New York, said Bruno's first-quarter performance was consistent with its results in the fourth quarter. "They had higher than expected gross margins and higher than expected selling, general and administrative expenses," he said. "I don't think that is sustainable long term. Something has got to give."

Bruno's should attempt to become more aggressive on pricing, which would lower gross margins, and simultaneously try to reduce operating costs, Church said. Bruno's, which has a union work force, has lagged behind the industry in terms of getting their expense structure down, Church said. "I just haven't seen anything positive [in terms of reductions] on the SGA line," he said.

Church attributed some of the chain's sales and same-store sales improvements to the "cycling" of the new square footage, which competitors opened in Bruno's operating areas last year. Bruno's operates 255 supermarkets in six Southeastern states.

1st-QUARTER RESULTS

Qtr Ended 9/24/94 9/25/93

Sales $653.6 million $640.9 million

Change 2.0%

Same-store 1%

Net Income $11.5 million $5.9 million

Change 95.1%

Net Inc/Share 15 cents 8 cents