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The Penn Traffic Co. yesterday posted revenues of $306.9 million in the second quarter of fiscal 2009, compared with $318.0 million in the second quarter of fiscal 2008, due to the company's reduction of its corporate-owned stores from 103 last year to 93 this year.
The grocer's net loss was $3.4 million, or 42 cents per share, in the second quarter, vs. $4.9 million, or 58 cents per share, in the year-ago period.
"In light of the grocery industry's challenges, we're working to take full advantage of the close proximity of our neighborhood locations to shoppers, the format of our stores, the big improvements we've made in our value-priced offerings, [and] enhanced marketing and promotions, including the expansion of our food- and gas-rewards programs," noted Penn Traffic president and c.e.o. Gregory J. Young. "We're also very focused on cost and expense controls, and working capital management. We'll continue holding the line on spending and emphasizing those projects that provide immediate value to our customers and our business."
Gross profit was $78.1 million, or 25.4 percent of revenues, in the second quarter, vs. $85.5 million, or 26.9 percent of revenues, last year. Besides diesel fuel costs, gross margin was also squeezed by rising food commodity costs, which have been only partly passed on to shoppers in price increases.
These factors were somewhat offset in the quarter by higher demand for Penn Traffic's Food Club and Value Time private label products, a positive response to the company's enhanced rewards program, process improvement initiatives, and expense-control measures, and C&S' produce procurement services (see the "Penn Traffic Expanding Procurement Agreement With C&S" article). Penn Traffic lowered selling and administrative expenses to $78.5 million, or 25.6 percent of revenues, in the quarter, vs. $85.8 million, or 26.9 percent, during the year-ago period. Second-quarter fiscal 2009 operating loss from continuing operations was $924,000, compared with $144,000 last year.
During a conference call yesterday, Penn Traffic c.f.o. Todd Nestor said the company expected to make "good progress" in the coming quarter from its continuing price optimization initiatives and the expanded C&S procurement agreement.
For the six months ended Aug. 2, Penn Traffic's revenues were $594.0 million vs. $616.0 million in the year-ago period. The company's net loss was $15.8 million, or $1.88 per share, in the first half of fiscal 2009, compared with $12.3 million, or $1.45 per share, last year.
Gross profit was $153.1 million, or 25.8 percent of revenues, in the first half of fiscal 2009, vs. $164.8 million, or 26.8 percent of revenues in the year-ago period. The company's operating loss for the first half of fiscal 2009 was $10.7 million, compared with $4.4 million last year.
Penn Traffic's retail food segment, which accounts for about 80 percent of company sales, reported revenues of $245.2 million in the second quarter, vs. $261.8 million in the year-ago period. Same-store sales declined 1.2 percent, compared with a 0.6 percent decrease last year. Gross profit from continuing retail operations was $73.2 million, or 29.9 percent of segment revenues, during the quarter, compared with $81.0 million, or 30.9 percent of revenues, in the year-ago period. Retail segment operating profit was $7.6 million for the second quarter of fiscal 2009 and $11.5 million in the second quarter of fiscal 2008.
Retail segment sales from continuing operations were $476.6 million for the 26 weeks ended Aug. 2, down from $506.9 million last year. Same-store sales went down 1.3 percent, vs. a 0.1 percent decrease in the year-ago period. Gross profit from continuing retail operations was $144.0 million, or 30.2 percent of revenues, during the first half of fiscal 2009, compared with $156.0 million, or 30.8 percent of revenues last year. Operating profit from continuing retail operations was $9.7 million for the first six months of fiscal 2008, and $19.4 million in the first half of fiscal 2008.
Meanwhile, wholesale food distribution segment revenues saw some improvement during the quarter and six-month period: $59.7 million in the second quarter vs. $54.1 million last year, and $113.2 million in the first half of fiscal 2009 vs. $104.6 million during the year-ago period. Segment top-line gains were partly attributable to the conversion of three corporate-owned stores into independent accounts served by Penn Traffic's wholesale business, as well as three new customers added at the end of fiscal 2008, the company said.
Syracuse, N.Y.-based Penn Traffic operates or supplies over 210 supermarkets in upstate New York, Pennsylvania, Vermont, and New Hampshire. Its retail food division includes corporate-owned stores with the P&C, Quality, and BiLo banners, and its wholesale food distribution business supplies independently operated supermarkets and other wholesale accounts.