US retailer Stater Bros. has reported a drop in third-quarter profits as an increase in costs offset higher sales.
Stater Bros., which runs over 160 stores in California, booked net income of US$7.2m for the 13 weeks to 24 June. A year earlier, the retailer posted net income of $7.6m.
The retailer said its operating profit dipped from $24.4m a year ago to $23.5m.
An increase in operating expenses hit Stater Bros. profits as the retailer's sales rose. Stater Bros. consolidated sales were up 1.1% at $949.8m. Like-store sales also increased 1.1%.
Stater Bros. Holdings Inc. Announce Sales Increases In The Third Quarter Of 2012
SAN BERNARDINO, Calif., Aug. 7, 2012 /PRNewswire/ -- Today, Jack H. Brown, Chairman, President and Chief Executive Officer of Stater Bros. Holdings Inc. announced financial results for the thirteen week and thirty-nine week periods ended June 24, 2012.
The Company's consolidated sales in the thirteen weeks ended June 24, 2012 were $949.8 million up $10.8 million or 1.14% from the thirteen weeks ended June 26, 2011 consolidated sales of $939.0 million.
The Company's thirty-nine weeks ended June 24, 2012 sales were $2.8 billion up $96.7 million or 3.51% from the prior year's thirty-nine week sales.
Like store sales increased 1.14% for the thirteen weeks ended June 24, 2012 and 3.51% for the thirty-nine weeks of fiscal 2012 compared to the same periods of the prior year.
The Company reported net income for the third quarter ended June 24, 2012 of $7.3 million compared to net income of $7.6 million for third quarter of the prior year. Net income for the thirty-nine week period of fiscal 2012 was $32.7 million compared to $19.8 million for the thirty-nine week period of fiscal 2011.
For the thirty-nine week period of fiscal 2012, the Company incurred $10.1 million less in interest expense compared to the same period of the prior year. The Company's reduction in interest expense is due primarily to the pay down of approximately $125.0 million of debt and to the refinancing of much of the remaining outstanding debt to a lower interest rate in the first quarter of fiscal 2011.
Brown said, "We have been able to grow our sales and our customer counts in a time of unprecedented economic challenges and a growing competitive environment because our 'Valued Customer' has responded to our marketing programs. At the beginning of the economic downturn we realized that our customers would be under tremendous pressure to make ends meet. We decided to do our part by making sure that our customers received value and great customer service on each of their visits to our supermarkets. We have continued to keep prices low, so our customers get great value on their shopping dollars.
"In the first quarter of fiscal 2011, we paid down debt and refinanced a significant portion of our remaining debt which reduced our interest expense. We have also focused on reducing our operating expenses where possible. These savings have made it possible to provide great value to our customers. They have responded by continuing to shop at their local Stater Bros. Market."
Stater Bros. is the largest privately owned Supermarket Chain in Southern California and the largest private employer in both San Bernardino County and Riverside County, with annual sales in 2011 of $3.7 billion. The Company currently operates 167 Supermarkets, and there are over 18,000 members of the Stater Bros. Supermarket Family.
