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Publix sees year-end lift in sales

Q4 earnings take hit from accounting rule change

Publix Super Markets Inc. finished 2018 on an upswing, reporting net and same-store sales gains for the fourth quarter and full year.

Lakeland, Fla.-based Publix said Friday that sales for the quarter ended Dec. 29 rose 3.8% to $9.3 billion from $8.9 billion a year earlier. Comparable-store sales edged up 1.1% for the period.

For all of fiscal 2018, sales totaled $36.1 billion, up 4.4% from $34.6 billion in 2017. Comp-store sales also increased, rising 2.1%.

“Our fourth-quarter results were impacted by an accounting rule change in 2018 and a onetime adjustment due to the Tax Act in 2017. Excluding these items, our net earnings were strong in the fourth quarter,” Publix CEO Todd Jones said in a statement. “Our associates continue to provide legendary service to our customers.”

At the bottom line, Publix’s net income for the fourth quarter fell to $407 million, or 57 cents per share, from $766.6 million, or $1.04 per share, a year ago. The company noted that the decrease reflects a negative impact from a new accounting standard that requires equity securities be measured at fair value with net unrealized gains and losses from changes in the fair value recognized in earnings. That was partially offset by a reduced effective income tax rate stemming from the federal Tax Cuts and Jobs Act of 2017.

Excluding the impact of the accounting change in 2018 and a onetime remeasurement of deferred income taxes in 2017, net earnings for the 2018 quarter would have been $660.3 million, or 92 cents per share, versus $542.4 million, or 74 cents per share, in the prior-year period, Publix said.

Fiscal 2018 net earnings came in at $2.4 billion, or $3.28 per share, up slightly from $2.3 billion, or $3.04 per share, in 2017. Adjusted net income — excluding the new accounting standard in 2018 and the income tax remeasurement in 2017 — was $2.5 billion in 2018, compared with $2.1 billion in 2017, with adjusted earnings per share at $3.47 and $2.74, respectively.

Publix said that, as of March 1, its share price climbed to $42.85 from $42.70 a year earlier. The employee-owned company’s stock is not publicly traded and only sold to Publix associates and board members.

Currently, Publix operates 1,213 supermarkets in Florida, Georgia, Alabama, Tennessee, South Carolina, North Carolina and Virginia, up from 1,172 stores a year ago.

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