CHARLOTTE — Strong sales increases at Harris Teeter stores helped Ruddick Corp. here post a 60.7% improvement in net earnings during the fiscal first quarter, which ended Jan. 2, the company said.
Ruddick, which also owns the American & Efird thread company, posted net income of $38.1 million on total sales of $1.11 billion. Sales at Harris Teeter increased 6.2% to $1.03 billion, and comparable-store sales increased by 2.2%. Harris Teeter's performance was driven by new stores, as well as and increase in customer loyalty and store visits resulting from lower everyday prices and increased promotions, the company said.
“We are encouraged by the indication of a more positive change in our customers' purchasing habits. During the quarter we realized higher growth in sales of items such as organic milk, premium beef, imported cheese and bakery products,” Thomas W. Dickson, chairman and chief executive officer of Ruddick, said in a statement.
Aggressive promotions helped draw more shoppers — and contributed to a 20 basis-point decline in gross margin, to 29.68% of sales — while a return to modest price inflation helped sales, said Andrew Wolf, a Richmond, Va.-based analyst with BB&T Capital Markets. Operating margin was flat year over year amid expense control and improved efficiencies.
Harris Teeter plans six new stores and seven remodels during the rest of the fiscal year, and estimates around $174 million in cap-ex for 2011.