SALISBURY, NC – Food Lion, Inc. (Nasdaq: FDLNA, FDLNB) reported consolidated first quarter sales of $2.3 billion. Same store sales, the industry benchmark which compares stores open more than a year, grew by 1.7 percent. Total sales for the first quarter were up 1.3 percent, however excluding prior year sales in the Southwest market which has since closed, total sales were up 5.0 percent over the prior year. Earnings of $55.2 million rose more than 20 percent over first quarter 1997 earnings of $43.6 million. Earnings per share were $0.12.
"During the quarter, we experienced positive sales trends for both Food Lion stores and our Kash n’ Karry subsidiary," said President and Chief Executive Officer Tom Smith. "This strength in sales, combined with the Company’s continued focus on expense control and ability to sustain gross margins, created a first quarter net margin of 2.4 percent. Strong expense control continues to be an asset, allowing us to keep prices competitive for our 10 million weekly customers."
Food Lion opened 14 new stores (including three replacement stores) during the quarter in Grovetown and Hazlehurst, Ga.; Northeast Station, Perry Hall, Randallstown, Reisterstown and Solomon’s Island, Md; Fairview, Mint Hill and Pembroke, N.C.; Barnwell, S.C.; and Christiansburg, Ruckersville, and Virginia Beach, Va. The Company completed remodeling at six locations, and closed four stores as part of its ongoing store performance evaluation process. At the end of the quarter, Food Lion operated a total of 1,164 supermarkets with total square footage of 36,471,769.
The Company has finalized the restatement of its 1997 annual financial statements and quarterly financial data and filed its annual Form 10-K with the Securities and Exchange Commission today. Net income for 1997 was $172.3 million, or $0.37 per share, and reflects restatements related primarily to the acquisition of Kash n’ Karry, and the store closing charge recorded for the Company’s divestiture of the Southwest market. These reclassifications have no effect on the current operating trends and cash flow of Food Lion. A copy of the Company’s Form 10-K may be obtained by contacting Food Lion’s investor relations department.
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 provide 10 million customers a week with Extra Low Prices and More at 1,164 Food Lion and Kash n' Karry 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