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Retailer-owned wholesale grocery distributor Unified Grocers, Inc. yesterday posted net earnings of $3.1 million for the second fiscal quarter ended April 3, 2010, compared with $2.5 million for the second quarter of fiscal 2009. The company attributed the improvement to a combination of sales increases and expense reductions.
Net sales for the second quarter of fiscal 2010 were $959.7 million for the 2010 period, vs. $951.7 million last year, an increase of 0.8 percent that Unified said was due primarily to the timing of Easter, which fell in the second quarter this year rather than the third quarter, as it did in fiscal 2009. Aside from the timing of Easter, the company would have seen about a 1 percent decline in sales because of the economy.
Earnings before patronage dividends and income taxes grew 20 percent and were $4.9 million for the second quarter of 2010, compared with $4.1 million last year. According to Unified, earnings increased as a result of higher sales and an ongoing focus on cost controls within its wholesale operations, although these factors were partly offset by higher pension and post retirement expenses and lower inventory-holding gains.
On a year-to-date basis, net earnings rose to $6.8 million (a 7 percent increase) while sales and earnings before patronage dividends fell $1.960 billion (a decrease 1.8 percent) and $15.6 million (a decline of 23 percent), respectively. A major influence on the drop in year-to-date earnings before patronage dividends was the unusually high level of food inflation and other vendor-related support during the first quarter of fiscal 2009 that hasn’t occurred so far in fiscal 2010, the company noted.
“Consumer demand for grocery items continues to be mixed in Unified’s marketplace," said president and CEO Alfred A. Plamann. “Some of our member retailers are doing quite well, particularly those in locations where consumer spending remains strong. On the other hand, some of our independents are finding this market — and the much hoped-for recovery — to be far more sluggish and distant than they had originally anticipated.”
Despite such inconsistent demand, Plamann observed that at Unified, “we are holding our own by making sure we have the right mix of products and services available for our member retailers and by continuing to keep a tight lid on expenses. The results have been positive — our earnings before patronage dividends for the first half of fiscal 2010 are almost exactly what we budgeted, and we expect this trend to continue for the remainder of the year.”
Los Angeles-based Unified supplies independent retailers throughout the western United States.