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Comps Up, Profits Down at Harris Teeter

MATTHEWS, N.C. — Harris Teeter Supermarkets here said third-quarter profits were down compared with a year ago, despite a 3.7% increase in comparable-store sales.

Net income totaled $15.8 million for the 13-week period, which ended July 1, down about 51% vs. year-ago levels. Profits were hit by expenses related to the acquisition of 10 stores from Lowes Foods.

Operating profit in the third quarter was $32.5 million, vs. $48.2 million a year ago. Without the Lowes Foods transaction costs — in which Harris Teeter traded six stores and paid Lowes $26.5 million — operating profits would have been $54 million in the most recent period, the company said. Third-quarter sales were up 4.6%, to $1.15 billion.

Read more: Harris Teeter Fortifies Its Base

Through three quarters, Lowes said net income totaled $59.7 million, down about 40% vs. the year-ago, 39-week span. Sales for the year-to-date span rose 6.5% to $3.39 billion, and comps were up 4.3%.

Andrew Wolf, a Richmond, Va.-based analyst with BB&T Capital Markets, said he believes “real” same-store sales growth in the third quarter — factoring out inflation — was up about 1%, making the company one of the few supermarket chains experiencing volume growth. “Real ID sales at Harris Teeter are similar to those at Kroger, the only other conventional chain in our coverage that is running positive,” he said in a research note Friday.

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