SCARBOROUGH, Maine -- Hannaford Bros. here said efforts to control costs contributed to a 15.3% increase in net earnings for the year ended Jan. 1.
totaled $54.6 million, an increase of 11%.
Sales declined 0.5% for the year to $2.05 billion, and fell 4.5% in the fourth quarter to $516.3 million.
On a comparable basis, or excluding an extra week in fiscal 1992 and the sales from 34 Wellby Super Drug stores sold in May 1992, Hannaford said sales rose 3.3% for the year and 3% for the fourth quarter.
Hugh Farrington, president and chief executive officer, said 1993 results have their "foundation" in the fact that the selling, general and administrative expense ratio declined from 19.9% of sales to 19.4% last year.
"What we set out to do [cut costs] and the fact that we were able to accomplish it in 1993 is good for our company and good for the future of our company," he told securities analysts at a New York breakfast meeting last week. SGA also declined in the fourth quarter, to 19% of sales from 19.7%. Gross margins fell in the 13-week quarter from 24.8% of sales to 24.6%.
Farrington said the lower gross margins in the fourth quarter means "competition was tough and pricing in the market is flat." Ed Comeau, a securities analyst at Lehman Bros., New York, said in a recent report upgrading Hannaford stock to a "buy," that the company has kept its cost structure in "excellent shape."
"Hannaford is extremely well-positioned for growth as the operating environment gradually improves," he said. "We expect same-store sales to turn modestly positive in 1994, following nearly two years in negative territory."
