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COLTON, Calif. -- Maybe it was too much of a good thing to last.
Stater Bros. Holdings, Inc.'s financial performance this year is suffering from comparison to 2004, when labor strife at other operators drove new customers to this regional grocer's doors.
Results for the 13-week second quarter and 26-week year-to-date period ended March 27, showed a dramatic decrease from last year -- a discrepancy the grocer was quick to attribute to the Southern California labor dispute, during which Stater Bros.' sales soared as shoppers abandoned affected chains Albertsons, Ralphs, and Safeway.
Sales for the second quarter dropped 14.8 percent to $842.9 million, compared to $989.4 million for the second quarter of 2004, during which the labor dispute was in effect. Total sales for half year decreased 16.6 percent, coming to $1.682 billion vs. $2.016 billion for the year-ago. Like-store sales plunged 18.4 percent and 20.3 percent for the 13-week and 26- weeks, respectively.
"It is not possible to compare any major category on our operating statements between fiscal 2004 and fiscal 2005, due to the major effects of the unprecedented labor dispute in fiscal 2004 that affected all of the Southern California supermarket industry," said Jack Brown, Stater Bros.' chairman, president, and c.e.o., by way of explanation. "The company is determined to maintain as much of the volume and as many of the new valued customers [gained during the strike] as possible. All of our valued customers have our commitment to provide a friendly and satisfying shopping experience on each and every one of their visits to our stores."
Earnings also fell into a ditch. The company's net income for the quarter was $3.6 million, compared with $30.2 million for the year-ago period. Net income for latest fiscal year-to-date was $6.9 million, vs. $64.7 million in 2004. The quarter and year-to-date results for 2004 also included a $13.3 million after-tax gain from a litigation settlement that transferred the remaining 50 percent ownership interest in Santee Dairies, Inc. to the Stater Bros. Santee's results have been consolidated in Stater Bros.' results since the settlement date of Feb. 6, 2004.
Stater Bros. Holding, Inc., the largest privately held supermarket chain in Southern California, operates 161 supermarkets through its wholly owned subsidiary, Stater Bros. Markets. The company also owns and operates Santee Dairies.