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CARTERET, N.J. -- Pathmark Stores, Inc. here, which has been slowly battling its way back to financial health through a range of restructuring programs, yesterday posted a net loss of $5.4 million, or 10 cents per share, for the first quarter of fiscal 2006, vs. a net loss of $2.1 million, or seven cents per share, in the same period last year.
The chain reported sales of $998.5 million for the latest quarter, ended April 29, down 0.4 percent from the year-ago period. Same-store sales slipped 0.1 percent.
The regional Mid-Atlantic grocer said the latest results included a pretax expense of $2.1 million, or two cents per diluted share, connected with noncash stock-based compensation; as well as pretax expenses of $0.9 million, or two cents per share, related to Pathmark's review of strategic alternatives. Excluding these items, the net loss in the first quarter of fiscal 2006 would have been $4.2 million, or eight cents, while the net loss in the first quarter of fiscal 2005 would have been $1.6 million, or five cents.
"We are making progress with our operating initiatives," noted c.e.o. John Standley in a statement. "Our first-quarter results improved markedly from the third and fourth quarters of 2005. Our merchandising, expense control, and logistics initiatives have put us on track towards becoming a profitable company."
In a conference call yesterday, Standley said Pathmark's nonfoods business, including pharmacy, baby care, and pet, has "recovered nicely," while meat and dairy sales have suffered because of deflation during the quarter. Shrink "improved dramatically" during that time, he added.
Standley spoke positively of the sales, merchandising, and marketing initiatives Pathmark has underway, including the improvement in the fresh food assortment and presentation, the reduction of shrink, the further development of private label products, and the use of online auctions, the last of which will yield about $9 million in savings annually. He also said that the company was starting to see savings from its early-retirement and union buyouts.
Standley said Pathmark was working with the firm of Coleman Brandworks on the grocer’s new prototype store, which it hoped to launch in about six months. In the meantime, Pathmark was working on eight minor and eight major renovations, he said, but the company doesn’t foresee incorporating any of the prototype’s features into those revamped stores before the fourth quarter.
Capital expenditures during the first quarter of fiscal 2006 came to $12.1 million, with total cap-ex for fiscal 2006 expected to be about $70 million, the chain said. It anticipates completing 16 store renovations during fiscal 2006.
Pathmark currently operates 141 supermarkets mainly in the New York-New Jersey and Philadelphia metropolitan areas.