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The Great Atlantic & Pacific Tea Co., Inc. yesterday posted sales for the fourth quarter ended Feb. 23, 2008 of $2.2 billion, vs. $1.3 billion last year. Comparable-store sales increased 3.0 percent, excluding sales for Pathmark stores acquired at the beginning of the fourth quarter. Comps for Pathmark, measured during the same period, grew 1.5 percent.
Sales for the full year were $6.4 billion, compared with $5.4 billion in 2006. Comparable-store sales rose 2.4 percent, which excludes sales for Pathmark stores. Comparable-store sales for Pathmark went up 0.2 percent in the last 12 months.
Due to integration costs related to the Pathmark acquisition, however, fourth-quarter net loss from continuing operations rose to $44.6 million, or $1.40 per diluted share, from a loss of $11.0 million, or 26 cents per diluted share, last year. Net income from continuing operations for fiscal 2007 was $87.0 million, or $1.37 per diluted share, compared with income of $12.8 million or 30 cents per diluted share, for fiscal 2006.
Despite the widening loss, company officials expressed a positive attitude. "The results in our retail operations have steadily improved during the last three years," noted A&P president and c.e.o. Eric Claus in a statement. "This past year has seen the strongest top line sales trend in many years. The Pathmark integration is progressing smoothly, with early assessments of potential synergies consistent with supporting the attainment of $150 million of projected synergies."
Claus listed the grocer's accomplishments over the past year, among them the Pathmark acquisition and integration, the latter of which is proceeding according to schedule, "without any major obstacles"; a new 10-year logistics contract with C&S Wholesale Grocers that fully aligns distribution, procurement, and warehousing goals; strategic market divestitures to realign the company's core Northeast business; successful renovations in its Fresh, Discount, and Gourmet formats; and the strongest comparable-store sale increases for one year, in over eight years.
During a conference call yesterday, Claus said that a combined A&P/Pathmark private label program was set to launch in the next few months, and that the first of the Pathmark stores with a Price Impact format would begin to roll out at the end of this month. That store will serve as "a template for a massive Pathmark refresh between now and the end of 2009," observed Claus, who described the new format as "super-impactful," with "significant" changes in signage, color, and pricing strategy. In answer to an analyst's question as to whether A&P would bring back Pathmark's late, lamented No Frills private label brand, Claus promised the resurrection of "some programs Pathmark was known for that were extremely successful," but didn't elaborate further.
Claus also mentioned that a freestanding Best Cellars prototype store would open in three weeks' time in Westwood, N.J.
"2007 has been a momentous year, as the company not only delivered improved results but also completed its strategic transformation," added executive chairman Christian Haub. "I am looking forward to continued progress in 2008 and beyond as we fully integrate Pathmark, further implement our format driven strategy, and look for additional ways to grow our business and create value for our shareholders."
A&P operates 447 stores in eight states and the District of Columbia under the following banners: A&P, Waldbaum's, Pathmark, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh, and Food Basics.