ARCADIA, Calif. -- Vons Cos. here reported lower sales and earnings for the year and fourth quarter ended Jan. 2.
Net income for 52-week fiscal 1993 fell 41.3% to $31.6 million, which includes a third-quarter restructuring charge of $56.9 million related to the company's cost-containment program. Fiscal 1992 was a 53-week year.
In the fourth quarter, net income fell 31.3%, which reflected the impact of lower same-store sales and one extra week in the year-ago quarter, said Roger E. Stangeland, chairman and chief executive officer.
Fourth-quarter sales fell 13.9% to $1.2 billion, or 6.7% on a comparable 12-week basis. Same-store sales declined 7.7% for the quarter and 9.1% for the year.
Operating cash flow for the year totaled $305.8 million, or 6% of sales. This compared with $321.1. million, or 5.7% of sales, in the previous year.
Stangeland said Vons began in late 1993 a move to reposition the company to improve sales and increase market share. "Our plan for 1994 is to invest virtually all of the savings from our cost-containment program into our pricing, promotions and store service to improve sales," he said.
Since Vons introduced its new pricing and service program, same-store sales trends have improved, Stangeland said.
Steve Ruggiero, a securities analyst with Donaldson Lufkin & Jenrette, New York, said same-store sales results, although down 7.7%, were better than he had expected. Comparable-store sales should remain negative during the first and second quarters before flattening out late in the year, Ruggiero said. "I think Vons will still show declines of 3% to 5% for the full year."
Ed Comeau, a securities analyst at Lehman Bros., New York, estimated Vons' same-store sales in the first quarter are down 3% to 5%.
"Vons' sales have been at such a low level that I would have expected a stronger snap-back," he said. The lower-price program Lucky Stores introduced a year ago in southern California helped improve same-store sales to a 2% increase in six months, he said.
