PORTLAND, Ore. -- Fred Meyer Inc. here reported record sales and earnings for the first quarter ended May 21.
million, net rose 14.1% to $16 million in the quarter.
Sales jumped 9.4% to $932.3 million in the 16-week period. Same-store sales rose 3.4%, with comparable food sales up 2.5% and comparable nonfood sales rising 4%.
Robert G. Miller, chairman and chief executive officer, said strong sales in certain nonfood categories, especially seasonal garden and outdoor merchandise, offset flat apparel sales.
Strong nonfood sales also offset the costs associated with the first-quarter opening of two new stores -- in Soldatna, Alaska, and Brookings, Ore. -- and the opening of a flow-through retail service center in Chehalis, Wash., midway between here and Seattle, for distributing apparel and certain hardline products.
Jonathan Ziegler, a securities analyst with Salomon Bros., New York, said the company's 2.5% increase in same-store food sales "puts it among the healthiest performers in the food industry -- only a little behind the healthiest public companies, Albertson's and Safeway, whose same-store sales were in the 3% range."
Ziegler said he believes the comparisons would have been better if not for the increased private-label sales, "which created deflationary pressure on prices," he said. Fred Meyer added to its private-label mix about a year ago, which helped the retailer boost private-label sales "dramatically" to 20.3% of sales from about 16% last year, Ziegler said.