SALISBURY, NC – Food Lion, Inc. (Nasdaq: FDLNA, FDLNB) reported 1997 earnings of $179
million. Excluding a third quarter pre-tax charge of $87.1 million associated with store
closings, earnings reached $233 million--a record level for the company. Earnings,
exclusive of the charge, were posted on sales of $10.2 billion and represent a 13 percent
increase over the prior years earnings of $206 million on sales of $9.0 billion. For
the fourth quarter, Food Lions earnings totaled $83.0 million, which is a 25 percent
increase over the same quarter in 1996. Sales for the quarter were $3.2 billion. There was
one additional week of sales in 1997.
The company provided shareholders with basic earnings per common share of $0.50 before
consideration of the store closing charge, compared with $0.44 basic earnings per common
share in 1996. Including the charge, basic earnings per common share were $0.38. For the
fourth quarter, basic earnings per common share were $0.18, compared with $0.14 in the
same quarter the previous year.
"We are extremely pleased with Food Lions strong financial performance for
the quarter and the year," President and CEO Tom Smith said today. "The figures
represent continued sales growth and profits by the company. Our team demonstrated
excellent cost control, enabling the company to grow earnings in an environment of
relatively flat industry sales and low food price inflation."
Food Lion completed the quarter and the year with positive same store sales--up 0.8
percent for the quarter and 0.6 percent for the year.
Kash n Karry stores were operationally profitable in the fourth quarter of the
year, however final costs related to integration of the subsidiary resulted in a fourth
quarter loss of less than $0.005 per share.
"We have seen great improvement in the Kash n Karry operation during the
fourth quarter, not only in sales momentum, but also in gross profits and expense control.
I am confident that Kash n Karry will positively contribute to consolidated earnings
in 1998," Smith added.
Food Lion plans to open 75 new stores in 1998, including 17 replacement stores, and to
remodel and/or expand 133 stores. Planned new construction and renovations are expected to
increase the companys retail square footage by 8 percent. During 1997, Food Lion
added 100 stores through the acquisition of Kash n Karry supermarkets, and opened an
additional 64 new stores, including the relocation of 25 existing stores. In addition, the
company closed 94 stores during the year, which included 61 stores it closed as part of
the divestiture of its Southwest markets. Food Lion remodeled or expanded 99 stores in
1997.
The Board of Directors approved an 11 percent increase in the cash dividend for
shareholders of record as of February 26, 1998. The dividend of $0.0375 per share for
outstanding Class A shares and $0.0370 per share for outstanding Class B shares will be
payable on March 12, 1998.
With 1997 sales of $10.2 billion, Food Lion, Inc. is one of the nation's largest
supermarket chains. The company and its 80,000 employees serve over 10 million customers a
week at more than 1,100 supermarkets in 11 states.
Safe Harbor Statement Regarding Forward-looking Information or Statements
This document contains forward-looking statements that involve uncertainties. Factors that could cause results to differ materially from those in the forward-looking statements are detailed from time to time in reports filed by the Company with the SEC, including Forms 8K, 10Q and 10K.
Contact: Chris Ahearn (704) 633-8250, Ext. 2892