THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, July 1, 1994 TAG: 9407010381
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Short : 46 lines
Food Lion Inc., the No. 2 grocery chain in Hampton Roads, said Thursday that its second-quarter earnings rose 13.4 percent.
Rebounding from the adverse publicity and labor troubles of the past two years, Food Lion made $34.8 million in the quarter ended June 18, up from $30.7 million in the second quarter of 1993. On a per-share basis, earnings improved to 7 cents from 6 cents.
The Salisbury, N.C.-based grocery chain operates 1,025 stores in 14 Southeastern states, including 62 stores in Hampton Roads that employ about 3,100 people.
Food Lion's sales climbed to $1.82 billion in the second quarter from $1.75 billion last year, even though it had 36 fewer stores at the end of the quarter than it had last year. As part of a restructuring, Food Lion closed 84 unprofitable stores in the past six months.
``Our shareholders will recall that we made some tough decisions at the end of 1993,'' said Tom Smith, Food Lion president and chief executive. ``Now we are beginning to see the results.''
Sales at stores that have been open for the past year rose 2.8 percent for the quarter.
Food Lion also announced its expansion plans for 1995. As in 1994, it will open 40 new stores. It will also renovate 100 to 120 stores next year, in addition to the 70 it is renovating this year.
``It's easy to see the contribution to earnings from new stores,'' Smith said. ``But what we've found is that the net gains from a good renovation program are sizable, and they come on stream even faster. Our accelerated plan for renovation lets Food Lion take advantage of our excellent existing locations.''
Food Lion has taken a beating in recent years. Earnings fell off after a Nov. 1992 ABC News broadcast accusing the company of unsanitary food-handling practices sparked a wave of negative publicity.
Last August the chain settled labor-related claims with the U.S. Department of Labor costing it $16.2 million. And it took a $170.5 million charge against earnings last year to pay for the closing of the unprofitable stores this year. by CNB