SAN BERNARDINO, Calif. — Stater Bros. Holdings here said yesterday it is disappointed with the earnings decline in its fiscal first quarter, but enthusiastic that low margins have helped boost customer counts.
“We’d like to see more on the bottom line, but customer count is our adrenaline,” Jack Brown, chairman and chief executive officer, said during a conference call with investors.
Net income for the quarter, which ended Dec. 28, fell 68% to $3.5 million, compared with $10.8 million a year ago. Sales rose 1.7% to $959.3 million, and same-store sales climbed 1.4%.
“Our plan is to assist customers during these very tough economic times, and the plan is working,” Brown said. “By holding back on price increases, which affected our profits, we gained more than 1 million new customers in the first quarter this year than a year ago, and we believe we can put more on the bottom line in the next quarter.”
Gross profit margin for the quarter fell to 25.73% of sales, compared with 25.92% a year ago. With unemployment in Stater’s primary operating area running at 9.3% — among the highest in the nation, Brown said — “we’ve formulated a marketing plan to build and grow our customer counts, and we know that when the economy recovers, we will end up with greater sales, and we believe it’s working that way now.”
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