INDIANAPOLIS -- Marsh Supermarkets here reported increased sales and earnings for the year ended April 2.
Net income rose 6.5% to $10.5 million. Excluding a $1.9 million credit related to accounting changes, however, net declined 13.2% to $8.5 million.
Sales for the year, which contained 53 weeks, rose 7.9% to a record $1.26 billion. Marsh said the extra week boosted sales by $23.6 million. On a comparable 52-week basis, the sales increase would have been 5.9%.
In the 13-week fourth quarter, net income totaled $1.7 million, or 20 cents per share, a 46.6% increase. This included after-tax charges of 5 cents per share to initiate a cost-cutting program and 5 cents per share to adjust various loss reserves, Marsh said.
The charges were "essentially offset" by related savings in the quarter and the earnings attributable to the extra week, the company said. The cost-reduction program is expected to reduce expenses by $2 million after tax annually. Sales in the fourth quarter, including the extra week, rose 15.6% to $312 million. Same-store sales, excluding the extra week, declined 0.4%, which Marsh said was an improvement over the previous three quarters.
Kevin Silverman, a securities analyst with Kemper Securities, Chicago, said Marsh performed "a little better than expected" in the fourth quarter despite a difficult competitive environment.
"Marsh has been very competitive in maintaining its market share and its image with consumers as the value place to shop because of its year-old superstores and by positioning itself to be very sharply priced on the top 500 items in advance of Meijer's openings," he said.
Meijer, Grand Rapids, Mich., did not open its first two stores here until the middle of May. "So Marsh's first-quarter results will probably tell a lot more about Meijer's impact," Silverman said.
Convenience Store Distributing, a distribution subsidiary, reported sales growth of 16.8% for the year.