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FRED MEYER REPORTS RECORD 1991 THIRD-QUARTER RESULTS

 FRED MEYER REPORTS RECORD 1991 THIRD-QUARTER RESULTS
 PORTLAND, Ore., Dec. 4 /PRNewswire/ -- Fred Meyer Inc. (NASDAQ: MEYR) announced today record results for its 1991 third quarter (12 weeks) and 40 weeks ended Nov. 9, 1991.
 Net sales for the 1991 third quarter rose 11.5 percent to $604.0 million over the $541.9 million reported in the third quarter of last year. Comparable store sales increased 5.6 percent for the quarter.
 Income from operations for the 1991 third quarter was $12.0 million, a 35.5 percent increase over the $8.9 million reported in the prior year's third quarter.
 Net income increased 70.1 percent to $5.5 million in the third quarter of 1991, compared to $3.2 million reported in 1990's third quarter. Net earnings per share were 22 cents for the third quarter of 1991 based on 25,399,000 shares outstanding, compared with 13 cents for the prior year's quarter based on 24,342,000 shares outstanding.
 Net sales for the first 40 weeks of 1991 rose 9.9 percent to $1.99 billion over the $1.81 billion reported for the first 40 weeks of 1990. comparable store sales increased 4.3 percent.
 Income from operations for the first 40 weeks of 1991 was $52.2 million, a 27.4 percent increase over the $41.0 million reported in the prior year.
 Net income increased 39.2 percent to $25.1 million during the first 40 weeks of 1991, compared to $18.0 million reported during the comparable period in 1990. Net earnings per share were $1.00 for the first 40 weeks of 1991 based on 25,034,000 shares outstanding, compared with 73 cents for the prior year's first 40 weeks based on 24,524,000 shares outstanding.
 Robert G. Miller, chairman of the board and chief executive officer, said, "We are extremely pleased with our third quarter sales and net income results. Continued improvements in expense controls and stronger margins, partially due to a lower LIFO charge in the third quarter, contributed to the improved results. The increase in net income for the quarter was achieved in spite of our having taken a $2.25 million pre-tax charge in the third quarter, reflecting severance and other costs associated with a work force reduction completed in early November 1991 of approximately 160 jobs within our non-store administrative and support departments. As a result of the work-force reduction, 1991 fourth quarter and future quarterly expenses will be benefited.
 "Expense controls were highlighted by lower wage costs, advertising expenditures, supplies and maintenance costs as a percent of sales. Better scheduling practices this year and reduced training and installation costs for the new cash register systems that were installed in 1990 continue to help reduce overall wage costs. Expense reductions were partially offset by higher lease expenses as a percent of sales, primarily related to the installation of the new cash register systems and in-store computer hardware. In addition, our expense savings continue to be offset in part by the 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 third quarter decreased 12.2 percent from 1990's third-quarter results, primarily the result of lower interest rates and continued good control of our investment in inventories. The 1991 tax rate was the same as 1990's third quarter and 40-week tax rate of 37 percent.
 "During the third quarter, we opened a new 200,000-square-foot multidepartment store in Fairbanks, Alaska, the third and final new store opening for the year. We plan on opening two new stores in 1992 and will have five major remodels in 1992," Miller said.
 Fred Meyer Inc., headquartered in Portland, Ore., is a leading regional retailer of a wide range of general merchandise, food, apparel, fine jewelry and home improvement products. The company currently operates 122 stores, including 94 large multidepartment stores, in Oregon, Washington, Utah, Idaho, Alaska, California and Montana.
 FRED MEYER INC.
 CONSOLIDATED STATEMENT OF OPERATIONS
 (Unaudited, in thousands except per-share amounts)
 12 Weeks Ended 40 Weeks Ended
 Nov. 9, Nov. 10, Nov. 9, Nov. 10,
 1991 1990 1991 1990
 Net sales $604,031 $541,853 $1,986,751 $1,807,261
 Costs and Expenses:
 Cost of merchandise
 sold (A) 423,986 382,449 1,395,210 1,272,299
 Operating and admin-
 istrative expenses 168,016 150,524 539,313 493,970
 Income from operations 12,029 8,880 52,228 40,992
 Interest expense (net) 3,282 3,738 12,436 12,399
 Income before income
 taxes 8,747 5,142 39,792 28,593
 Provision for income
 taxes 3,236 1,903 14,723 10,580
 Net income $ 5,511 $ 3,239 $ 25,069 $ 18,013
 Earnings per common
 share $ 0.22 $ 0.13 $ 1.00 $ 0.73
 Weighted average number
 of common shares
 outstanding 25,399 24,342 25,034 24,524
 (A) LIFO charge to cost
 of merchandise sold $ 1,535 $ 2,200 $ 7,450 $ 9,000
 CONDENSED BALANCE SHEETS
 (Unaudited, in thousands)
 Nov. 9, Nov. 10,
 ASSETS 1991 1990
 Current Assets:
 Cash $ 33,965 $ 27,399
 Inventories 479,782 474,025
 Receivables (net) 20,335 17,530
 Prepaid and other 19,252 23,522
 Total current assets 553,334 542,476
 Property and equipment (net) 471,791 418,751
 Other assets 8,108 7,378
 Total $1,033,233 $968,605
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Accounts payable/outstanding checks $ 304,182 $285,226
 Income taxes 2,006 8,700
 Accrued expenses/other 62,077 59,011
 Total current liabilities 368,265 352,937
 Long-term debt including mortgages 271,668 270,224
 Capital leases and deferred
 lease transactions 69,287 66,634
 Deferred income taxes 10,342 9,220
 Shareholders' equity 313,671 269,590
 Total $1,033,233 $968,605
 -0- 12/4/91 R
 /CONTACT: Ken Thrasher of Fred Meyer Inc., 503-232-8844/
 (MEYR) CO: Fred Meyer Inc. ST: Oregon IN: REA SU: ERN


LM-SF -- SE001 -- 9140 12/04/91 11:06 EST
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Date:Dec 4, 1991
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