Salisbury, NC Delhaize America (NYSE: DZA; DZB) today announced third quarter 1999 earnings of $73.0 million, or basic earnings per common share of $0.47, which reflects the Company’s one-for-three reverse stock split on September 9, 1999. This represents a 20 percent increase over the same quarter in 1998, excluding the impact of the $12 million tax refund the Company received during that period.
The Company’s same store sales increased 2.5 percent during the quarter, and overall sales performance continued to be strong, with consolidated sales of $2.6 billion, an increase of 9 percent over third quarter 1998.
“I am pleased with our continued sales and earnings increases in the past quarter,” said Delhaize America Chief Executive Officer Bill McCanless. “Our consistent increases show that our family of supermarket chains understand their customers’ needs and continue to meet those needs. In addition, we are improving sales of higher-margin items, which continues to improve our gross profit performance and add value for our Company and its shareholders.”
In total, Delhaize America chains opened a total of 24 new supermarkets and remodeled 43 stores during the quarter. The Company plans to complete a total of 100 new stores and 140 remodels, increasing total square footage by 10 percent in 1999.
The Company opened 23 new Food Lion stores, including three replacement stores, in Dalton and Martinez, Ga.; Churchville, Elkton, Germantown, and Marlboro, Md.; Chapel Hill, Cherokee, Fuquay Varina, Lenoir, Morrisville, Raleigh (2), and Sunset Beach, N.C.; Murrells Inlet and Summerville, S.C.; Chesapeake, Forest, Marshall, Newport News, Richmond, and Virginia Beach (2), Va.; and remodeled 42 supermarkets.
The Company opened one Kash n’ Karry replacement store in Riverview, Fla. and converted 51 Food Lion supermarkets in Florida to the Kash n’ Karry and Save ‘n Pack formats. The store conversions were completed on September 1, and Kash n’ Karry will continue to remodel and in some cases expand the former Food Lion stores over the next 18 months. Kash n’ Karry remodeled one store during the third quarter.
Earlier this month, Delhaize America announced its internal growth plans for 2000, which include adding a total of 85 new stores and remodeling or expanding approximately 150 supermarkets. The effect is to increase square footage by 8 percent, before consideration of future acquisitions.
Delhaize America is proceeding with regulatory filings in conjunction with its agreement on August 18, 1999 to acquire Hannaford Bros. Co., which operates 155 supermarkets primarily in the Northeast, with 1998 sales of $3.3 billion. The Company expects to finalize the acquisition in early 2000, pending customary regulatory approvals and a vote of Hannaford shareholders.
Food Lion stores fared well during Hurricane Floyd, which barraged the East coast with wind and water last week. All Food Lion stores and distribution centers are open for business, with the exception of three Eastern North Carolina stores, which sustained flood damage.
With 1998 sales of $10.2 billion, Delhaize America is one of the nation's largest supermarket companies. The Company and its more than 92,000 employees serve more than 10 million customers a week at 1,120 Food Lion and 143 Kash n' Karry and Save 'n Pack supermarkets. With the addition of Hannaford Bros., Delhaize America will have over 1,400 stores throughout the eastern United States from Maine to Florida, with total projected annual revenue for 2000 of approximately $15 billion and more than 116,000 full-time and part-time employees.
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