99 Cents Only Improves Its Perishables Offering

CITY OF COMMERCE, Calif. 99 Cents Only Stores here said an initiative to improve handling and displaying of perishable merchandise over the past six months has resulted in a better quality of offering, though overall perishables penetration is the same as it was a year ago. Eric Schiffer, chief executive officer of the 276-store discount chain, said the initiative was begun six months ago to make

CITY OF COMMERCE, Calif. — 99 Cents Only Stores here said an initiative to improve handling and displaying of perishable merchandise over the past six months has resulted in a better quality of offering, though overall perishables penetration is the same as it was a year ago.

Eric Schiffer, chief executive officer of the 276-store discount chain, said the initiative was begun six months ago to make sure the stores were prepared for the summer-selling season, “and hopefully we will see better results in the longer term,” he added.

Perishables includes produce, refrigerated items like deli, frozen foods and ice cream, as well as bread and milk, he noted. While perishables as a percentage of sales have remained even, Schiffer said overall food sales have increased “because of the challenging economic environment where people are forced to choose between needs and wants.” He did not give a breakdown for overall food or perishables.

Schiffer made his remarks during a conference call with analysts to discuss financial results for the first quarter that ended June 26, during which net income rose 76.8% to $16.8 million and sales climbed 4.3% to $346.5 million, with same-store sales increasing 2.7%.

In response to a question, he also said 99 Cents Only has been bringing in executives from other companies — “people with broader experience to help take us to the next level and who can help us operate more effectively to grow the concept.”

He said the company intends to bring in additional outside executives “to act as counselors and teachers so we can move to a higher operating level.”

Schiffer also said the company is within two years of completing a systems rollout that will give it an automated replenishment ordering system at store level by fiscal 2012. He said upgrades that started last year will continue this year and next, culminating when the company completes the rollout of a point-of-sale system in two years and begins integrating administrative and labor support systems.

Q1RESULTS

Qtr Ended 6/26/10 6/27/09
Sales $346.5M $321.9M
Change +4.3%
Comp-store +2.7%
Net Income $16.8M $9.5M
Change +76.8%
Inc./Share 24 cents 14 cents