FOOD LION ROARS BACK WITH RECORD QUARTERLY GAIN

SALISBURY, N.C. -- Food Lion here, citing a federal tax refund of $12 million, said it achieved record earnings of $72.8 million for the third quarter ending September 12.

company said. Food Lion said the refund followed an Internal Revenue Service audit of prior tax years and included interest earned.

The company said sales rose 0.5% to $2.4 billion for the 12-week quarter and 1% to $7 billion for the year to date, while same-store sales increased 1.8% for the quarter and 2.1% for the 36-week period.

Adjusting for prior year sales in the Southwest division, which closed during last year's fourth quarter and for changes in recording sales tax related to the company's loyalty card program, Food Lion said total sales for the quarter were up 5.5% compared to the prior year.

According to Tom Smith, president and chief executive officer, "In spite of a heightened competitive environment in our Southeastern markets, Food Lion was able to achieve solid same-store sales growth during the quarter, while continuing to improve gross margin and strengthen earnings."

The company said earnings before interest, taxes, depreciation and amortization rose 6.9% to $55,777 for the quarter and 6% to $162 million for the year to date.