Stater Bros. earnings jump 197.2%

MMR,  Feb 26, 2007  

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COLTON, Calif. -- Stater Bros. Holdings Inc. saw earnings nearly triple on single-digit top-line growth in the 13 weeks ended December 24.

The southern California food retailer began its fiscal 2007 year with a 197.2% increase in net income to $9.9 million, as sales rose 4.3% to $904.1 million. Management notes that the timing of Christmas Day added one more sales day in the first quarter of fiscal 2007 compared with the prior-year period. After taking into consideration the effect of Christmas Day (the only day the chain stores are closed), same-store sales increased 1.4%.

Jack Brown, chairman, president and chief executive officer, says that first quarter results benefited from improved gross margins and decreased selling, general and administrative (SG&A) expenses as a percentage of sales. Indeed, gross margin escalated 61 basis points over prior-year levels to 26.76%, while the SG&A ratio declined 61 basis points to 22.32% of sales. With that, operating profit surged 60.2% to $28.2 million.

Bottom-line results were fortified by a 12.6% increase in interest income to $2.83 million and a 2% decline in interest expense to $14.3 million. Stater Bros. Holdings, the largest privately held supermarket chain in southern California, operates 162 supermarkets through its wholly owned subsidiary, Stater Bros. Markets.

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