MONTVALE, N.J. -- A&P here said last week earnings per share will fall well below analysts' expectations for the first quarter ended June 17 because of a general slowdown in consumer spending and lower sales results in two groups of acquired stores.
will be approximately 15 cents, compared with a loss of 51 cents for last year's first quarter.
Christian Haub, president and chief executive officer, said greater interest expense contributed to the drop in earnings, along with sales that were lower than expected at the six Schwegmann Giant Supermarkets in New Orleans and the seven units of The Barn Fruit Markets in Hamilton, Ont., that A&P acquired in September.
Excluding special charges related to renewal initiatives, A&P said it expects first-quarter earnings to drop 20% to 40 cents per share, compared with 50 cents per share in 1999. The company also said operating cash flow excluding those charges will be up approximately 4% for the quarter.
Comparable store sales rose 2.4% during the quarter, despite a relatively soft sales environment, the company said, marking the eighth consecutive quarter of comparable store increases and a growth rate above the industry average.
According to Haub, "Our competitive profile in the marketplace remained strong, with each operating region achieving comparable store sales increases. Moreover, independent research data indicates our stores outperformed competition in our markets during the quarter."
Haub said operating units in the Atlantic region, Canada, Michigan and New Orleans performed at or above last year's level of operating profits.
Looking ahead, Haub said, "If the overall sales environment remains as it was in the first quarter, we would expect an [operating cash flow] improvement of approximately 10%, translating to earnings in the range of $2 per share for the full year, excluding [initiative] costs."