SALISBURY, N.C. -- Food Lion here last week said income exclusive of a charge to cover store closings increased 12.1% to $30.6 million in the fourth quarter ended Jan. 1.
the store-closing charge, Food Lion reported a loss of $73.4 million in the 16-week quarter. This compared with net earnings of $27.3 million in 1992's 17-week fourth quarter.
In the year-ago fourth quarter, Food Lion's results were affected by a "PrimeTime Live" television news report critical of its meat and deli operations. Despite the difficulties related to the television report and the store closing charge, Food Lion said it remained profitable in 1993 with annual net of $3.9 million.
Gross margins improved 71 basis points to 19.52% of sales in the quarter, the first gross-margin increase in several quarters. Selling, general and administrative expenses rose as a percentage of sales by 21 basis points to 14.65%.
Rich Church, a securities analyst at Smith Barney Shearson, New York, said after adjusting for inventory and restructuring charges net income was a little short of expectations, but sales continue to get better.
"That's the key, Food Lion is continuing to improve the sales line," he said. "Expenses, though, are the bugaboo."