VERNON, Calif. - Smart & Final here reported increased sales and earnings for the second quarter ended June 19.
income of $7.7 million, compared with a loss of $5.9 million a year ago, when the adoption of new accounting standards in the first quarter resulted in a nonrecurring, noncash net charge of $12.9 million.
Excluding the 1993 charge, net income for this year's first half rose 11.8%.
Sales for the quarter rose 9.8% to 216.8 million. Same-store sales increased 4.9% for the quarter and 6.3% for the half.
The company also said same-store transactions rose 3.1% and 4% for the respective periods, and total customer transactions rose 10.2% to 6.2 million for the quarter. In addition, comparable average transaction size increased by 1.8% for the quarter, marking the third consecutive quarter in which that figure increased after three years of decline.
Roger M. Laverty 3rd, president and chief executive officer, said, "Although the California economy remains soft, Smart & Final's financial results were very strong. Our northern California store sales have gained excellent momentum due to our aggressive marketing campaign, and we are very pleased with the initial sales from our second store in Mexico."
According to Jonathan Ziegler, a securities analyst with Salomon Bros., New York, the company's 4.9% same-store sales increase for the quarter was due in large part to the company's promotional efforts in northern California.
"Smart & Final has added nine stores to northern California over the 12 months, giving it 30 stores and enough critical mass to start a major advertising campaign to draw attention to it.
"A similar campaign the company ran in southern California in late 1993 drove comps there that year and seems to have good legs because sales there remain good."
Also aiding Smart & Final's comparison, Ziegler said, is the small proportion of meat and produce in its mix. "Those categories experienced more deflation than groceries and other sections, so Smart & Final had less deflationary pressure on its selling prices."