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CHARLOTTE, N.C. -- New-store activity and higher comparable-store sales helped Harris Teeter increase first-quarter sales 11.2 percent, to $796.3 million, parent company Ruddick Corp. reported yesterday. The retailer revealed plans to open 16 new stores during fiscal 2007, with a continued emphasis on the northern Virginia market.
Harris Teeter's comparable-store sales for the quarter ended Dec. 31, 2006 increased 3.31 percent.
During the quarter, Harris Teeter opened five new stores, closed two older stores, and completed the major remodeling of three stores, two of which were expanded in size. Since the first quarter of fiscal 2006, Harris Teeter has opened 20 new stores while closing or divesting nine stores, for a net addition of 11 stores.
Operating profit at Harris Teeter increased by 6.3 percent, to $35.4 million, compared with $33.3 million in the prior-year period. Operating profit as a percent of sales was 4.45 percent, compared with 4.65 percent. The company attributed the change to new-store pre-opening costs of $5.0 million (0.62 percent of sales) and $1.6 million (0.23 percent of sales) in the first quarter of fiscal 2007 and fiscal 2006, respectively.
Harris Teeter said its operating profit increased primarily through the continued growth in total and comparable-store sales, as a result of net new store growth and effective retail pricing, product differentiation, and targeted promotional spending programs that drove comparable-store sales gains.
The retailer also noted that sales gains, along with continued emphasis on operational efficiencies, have provided it the leverage to help offset incremental costs associated with a new-store development program and increased store-supply costs, bank card fees, and employee benefit costs.
Thomas W. Dickson, chairman of the board, president, and c.e.o. of Ruddick Corp., said in a statement that comps improved "at the same time that some of our new-store openings included locations in proximity to some of our existing stores, which can cannibalize some sales but increase our overall market share."
The company said it plans to open 16 new stores (one of which will be a replacement for an existing store) and complete the remodeling on six more stores during the remainder of fiscal 2007. It said it expects the new-store development program for fiscal 2007 to result in a 14.7 percent increase in retail square footage, compared with an 8.4 percent increase in fiscal 2006.
Ruddick projected capital expenditure expenses to be approximately $214 million for fiscal 2007, and said its plans call for expanding Harris Teeter's northern Virginia market.
Harris Teeter operates 155 stores in seven Southeastern states. Ruddick Corp., its parent company, also operates American & Efird, Inc., one of the world's largest global manufacturers and distributors of industrial sewing thread, embroidery thread, and technical textiles.