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FRED MEYER REPORTS RECORD FOURTH QUARTER, ANNUAL SALES AND EARNINGS FOR 1991

 FRED MEYER REPORTS RECORD FOURTH QUARTER,
 ANNUAL SALES AND EARNINGS FOR 1991
 PORTLAND, Ore., March 3 /PRNewswire/ -- Fred Meyer Inc. (NASDAQ: MEYR) announced today record results for its 1991 fourth quarter (12 weeks) and year ended Feb. 1, 1992.
 Net sales for the 1991 fourth quarter rose 7.1 percent to $716.0 million, over the $668.8 million reported in the fourth quarter of last year. Comparable store sales increased 3.3 percent for the quarter.
 Income from operations for the 1991 fourth quarter was $34.1 million, a 28.5 percent increase over the $26.5 million reported in the prior year's fourth quarter. During the fourth quarter of 1991, the company reversed $8.3 million in restructuring charges originally established in 1989 related to reserves the company had set up for the closure of six stores the company has elected not to close due to improved results over those originally projected. In addition, during the fourth quarter the company included in operating and administrative expenses a charge for $8.7 million related to writing off previously capitalized software development costs which were expensed due to the change in the IBM system architecture from a distributed system to a centralized computer system. Excluding the impact of these two items on income from operations, 1991 income from operations was $34.5 million, a 30.2 percent increase over the prior year.
 Net income increased 29.5 percent to $20.2 million in the fourth quarter of 1991, compared to $15.6 million reported in 1990's fourth quarter. Net earnings per share were 79 cents for the fourth quarter of 1991 based on 25,678,000 shares outstanding, compared with 64 cents for the prior year's quarter based on 24,420,000 shares outstanding. Excluding the impact of the two adjustments described above, 1991 net income would have been $20.4 million, a 31.3 percent increase over the prior year, and net earnings per share would have been 80 cents.
 Net sales for the 52 weeks of 1991 rose 9.2 percent to $2.70 billion over the $2.48 billion reported in 1990. Comparable store sales increased 4.0 percent for the year.
 Income from operations for 1991 was $86.3 million, a 27.8 percent increase over the $67.5 million reported in the prior year. Excluding the impact of the two adjustments taken in the fourth quarter of 1991, income from operations for 1991 was $86.8 million, a 28.5 percent increase over the prior year.
 Net income increased 34.7 percent to $45.2 million during 1991, compared with $33.6 million reported during the same period in 1990. Net earnings per share were $1.80 for 1991 based on 25,182,000 shares outstanding, compared with $1.37 for the prior year based on 24,500,000 shares outstanding. Excluding the impact of the two adjustments taken in the fourth quarter of 1991, net income for 1991 would have been $45.5 million, a 35.5 percent increase over the prior year, and net earnings per share would have been $1.81.
 Robert G. Miller, chairman of the board and chief executive officer, said, "We are pleased with our fourth quarter sales and net income results in light of the slow economy and softness in consumer spending habits. Our continued focus on lowering the company's expenses as a percent of sales primarily contributed to the improved net income results. Promotional activities in response to a more competitive selling environment lowered gross margins during the quarter, offset in part by a LIFO credit due to lower inflation rates. Good inventory control also minimized clearance markdowns at year-end and helped lower our interest expense during the fourth quarter.
 "Lower expenses were again highlighted by reductions in store labor costs, advertising expenditures, non-MIS corporate support department labor costs, and maintenance costs as a percent of sales. Better scheduling practices and less overtime being worked highlighted the improvement in store labor costs. Expense reductions were partially offset by higher lease expenses, amortization of completed management information systems, and our decision to expense a greater portion of software development costs as they are incurred.
 "Interest expense for the fourth quarter decreased 19.8 percent from 1990's fourth-quarter results, primarily the result of lower interest rates. The 1991 tax rate was 35.4 percent, versus 1990's tax rate of 32.1 percent.
 "During 1992 we plan on opening two multidepartment stores, one in Newberg, Ore., and one in Yakima, Wash., which replaces an older store whose lease will expire. We also plan to complete four to five major remodels," Miller said.
 Fred Meyer Inc., headquartered in Poincluding 94 large multidepartment stores, in Oregon, Washington, Utah, Alaska, Idaho, California and Montana.
 FRED MEYER INC.
 CONSOLIDATED STATEMENT OF OPERATIONS
 (In thousands except per-share amounts)
 Quarter Ended Year Ended
 Feb. 1, Feb. 2, Feb. 1, Feb. 2,
 1992 1991 1992 1991
 Net sales $715,970 $668,794 $2,702,721 $2,476,055
 Costs and expenses:
 Cost of goods sold (A) 497,611 462,036 1,892,821 1,734,335
 Operating and admin-
 istrative expenses 192,579 180,242 731,892 674,212
 Restructuring charge (8,289) -- (8,289) --
 Income from operations 34,069 26,516 86,297 67,508
 Interest expense (net) 2,866 3,575 15,302 15,974
 Income before income
 taxes 31,203 22,941 70,995 51,534
 Provision for income
 taxes 11,045 7,371 25,768 17,951
 Net income $ 20,158 $ 15,570 $ 45,227 $ 33,583
 Earnings per common
 share $ 0.79 $ 0.64 $ 1.80 $ 1.37
 Weighted average number
 of common shares
 outstanding 25,678 24,420 25,182 24,500
 (A) LIFO charge to
 cost of goods sold $ (1,278) $ (216) $ 6,172 $ 8,784
 CONDENSED BALANCE SHEETS
 (In thousands)
 Feb. 1, Feb. 2,
 ASSETS 1992 1991
 Current Assets:
 Cash $ 29,988 $ 28,978
 Inventories 403,275 378,260
 Receivables (net) 14,442 16,864
 Prepaid and other 39,057 41,317
 Total current assets 486,762 465,419
 Property and equipment (net) 479,025 432,998
 Other assets 7,007 7,339
 Total assets $972,794 $905,756
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Accounts payable/outstanding checks $244,711 $231,806
 Income taxes 1,731 5,744
 Accrued expenses/other 66,278 67,781
 Total current liabilities 312,720 305,331
 Long-term debt including mortgages 240,968 232,881
 Capital lease and lease obligations
 related to the restructuring charge 27,370 31,605
 Deferred lease transactions 40,017 36,059
 Deferred income taxes 16,565 14,581
 Shareholders' equity 335,154 285,299
 Total liabilities and
 shareholders' equity $972,794 $905,756
 -0- 3/3/92
 /CONTACT: Ken Thrasher of Fred Meyer, 503-232-8844/
 (MEYR) CO: Fred Meyer Inc. ST: Oregon IN: REA SU: ERN


LM-JH -- SE003 -- 4688 03/03/92 17:15 EST
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