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Tops’ Q1 Sales Down, Profits Up

WILLIAMSVILLE, N.Y. — Tops Holding Corp. here, parent of the Tops Friendly Markets chain, swung to a first-quarter profit this year, although the timing of the Easter holiday and the disposition of five former Penn Traffic stores contributed to a reduction in first-quarter sales, the company said.

Net income totaled $651,000 for the 16-week quarter, which ended April 12, vs. a loss of $2.1 million in the year-ago period. Operating income increased to $19.3 million, or 2.7% of sales, which the company attributed to a decline in utility costs and to cost-containment initiatives.

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Sales for the quarter were down 1.8%, to $704.4 million, including a 2% decline in comparable-store sales, excluding gas. The company attributed the decline in comps in part to the early Easter this year, noting that weak post-Easter shopping fell in the first quarter of 2012, rather than the second quarter of 2011. The timing of the company’s Monopoly promotion also had an impact, Tops said.

Gasoline sales increased 11.2%, to $64.9 million due to an 8.4% increase in price per gallon sold and the addition of four new fuel stations since July 2011.

Frank Curci, president and chief executive officer, said the company’s recently opened smaller-format stores and its converted Penn Traffic locations have performed better than expected, and will continue to drive sales growth in the future.

“Our performance in the first quarter was strong,” he said in a conference call.

Tops, ended the quarter with 124 company-owned supermarkets and five franchised locations. The company is planning two new stores this year — likely smaller formats, Curci said — along with several remodels. It plans about $25 million to $30 million in capital expenditures.

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