Giant Food's profits rise 8% sales up 4.8%


Giant Food Inc. expanded its hold on the stomachs and pocketbooks of area food shoppers this spring, reporting yesterday robust gains in sales and profit in its latest quarter.

The Landover-based company, the dominant grocery chain in the Baltimore/Washington region, announced that sales increased by 4.8 percent, from $829.70 million to $869.24, for the 12 weeks that ended May 20, compared with the same period last year.

Sales at stores open for at least a year grew by 2.6 percent.

Profits for the period were up more than 8 percent.

"This is the most positive earnings report in several years," said analyst Kurt Funderburg of Ferris, Baker Watts Inc.

Promotional sales on meat, delicatessen items and fresh produce, the company said, helped drive growth.

"We were aggressively promotional throughout the quarter," said Giant Senior Vice President David B. Sykes.

Net income for the company's first quarter rose to $22.1 million, or 37 cents per share, from $20.4 million, or 34 cents per share.

The increase would have been even sharper, the company said, had it not been for last year's sale of Giant's interest in an automatic teller machine operation, which accounted for about 2 cents per share in the year-ago reporting period.

Giant's earnings matched analysts' estimates, according to Zacks Investment Research.

The company also squeezed more profit out of every dollar in sales in the quarter: Net income represented 2.54 percent of sales for the 12-week period, compared with 2.46 percent over the same time last year.

The numbers are expected to continue rising as Giant, now operating 161 supermarkets, moves forward on an 18-store expansion, which was announced in late March.

The first of the new stores opened May 24 in Fairfax, Va., replacing an older Giant.

Two stores are scheduled to open in late summer -- in the Concord Square Shopping Center in the Brandywine area of Delaware and in Short Hill Market in Cherry Hill, N.J.

Construction also is under way on four stores -- in Collington and Owings Mills in Maryland and River Oaks and Wellington in Virginia.

"Our expansion plans," Mr. Sykes said, "are on target."

Giant Food's earnings report was released after trading ended on the American Stock Exchange. The company's Class A shares closed yesterday at $28.75, up 25 cents.

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