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Tops Swings to Profit in Q4

WILLIAMSVILLE, N.Y. — Tops Friendly Markets here swung to a $1.2 million profit in the fiscal fourth quarter behind increases in traffic and same-same sales at renovated locations as well as reduced expenses.

The retailer lost $13.8 million in the same period a year ago. Net sales of  $540.1 million in the most recent period increased by 1.7%. Same-store sales improved 1.4%, driven by higher gasoline sales. Excluding gas, sales totaled $494 million, up 0.2% for the quarter, which ended Dec. 31. For the full year, Tops posted net earnings of $5.8 million, recovering from a $27 million loss in fiscal 2010. Sales of $2.4 billion increased by 4.3%.

“The strong top-line results, coupled with the work we’ve done on controlling costs have led to the improved bottom-line results and allowed us to bring even more value to the customer,” Frank Curci, president and chief executive officer, said in a conference call discussing results. “I believe we’re on the right track.”

Curci characterized Tops’ competitive situation as “fairly stable” with few new competitors, but noted its competitors are EDLP players and discounters.

“Our major competitors are Wegmans and Wal-Mart, and both of them are EDLP operators, so we don’t see a lot of promotional activity, just an everyday program that’s pretty strong. Of new competitors the thing we have seen the most are on the low end, like Save-A-Lot, Aldi and PriceRite.”

Consumers facing continued economic pressure are buying less per trip but also buying more private label, he added. Private-label sales were up by 5% over last year.

Curci said Tops had retained possession of three of the seven former Penn Traffic supermarkets it was ordered to sell by the Federal Trade Commission last summer when a buyer was unable to be found. Two of those supermarkets are now operating under the Tops banner and the third one was closed. Tops previously sold three stores to Hometown Markets. The divestiture was related to Tops’ 2010 acquisition of Penn Traffic.

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