Village Super Market reports losses in Q1 2014
Net loss was $6,831,000 in the first quarter of fiscal 2014 compared to net income of $5,855,000 in the first quarter of the prior year. The first quarter of fiscal 2014 includes a $10,052,000 charge to income tax expense relating to prior years as a result of an unfavourable court decision by the New Jersey Tax Court related to a dispute over nexus, while the first quarter of fiscal 2013 includes income from the national credit card lawsuit of $693,000 (net of tax) and a charge for the settlement of a landlord dispute of $376,000 (net of tax). Excluding these items from both fiscal years, net income in the first quarter of fiscal 2014 declined 42% compared to the prior year primarily due to the prior year including substantially greater sales in the last week of the quarter due to hurricane Sandy, lower gross profit percentages, higher operating expenses as a percentage of sales and an increase in the income tax rate as a result of the New Jersey Tax Court decision.
Sales were $357,046,000 in the first quarter of fiscal 2014, a decrease of .3% compared to the first quarter of the prior year. Same store sales also decreased .3% due to three store openings by competitors and very high sales in the last week of the first quarter of the prior year as customers prepared for hurricane Sandy. These decreases were partially offset by increased sales in two stores that were remodelled last year. Excluding the impact of hurricane Sandy on the first quarter of the prior year, same store sales increased .9% in the first quarter of fiscal 2014. Sales continue to be impacted by economic weakness, high gas prices and high unemployment, which has resulted in increased sale item penetration and trading down. The Company expects same store sales in fiscal 2014 to increase from .5% to 2.5%.
Gross profit as a percentage of sales decreased to 26.2% in the first quarter of fiscal 2014 compared to 26.7% the first quarter of the prior year due to decreased departmental gross margin percentages. Gross margins declined in several departments primarily due to investments in lower prices to combat nontraditional competitors. These decreases were partially offset by improved product mix and lower promotional spending.
Source: marketwatch.com