A&P Narrows Loss in Q1, Logs Positive Comps

MONTVALE, N.J. -- The Great Atlantic & Pacific Tea Co. Inc. yesterday reported a narrower loss for its first quarter ended June 17, an improvement for the chain, which is in recovery mode, thanks to cost improvements and improvements in store operations, the chain said.

For the quarter, A&P's net loss was $6.1 million, or 15 cents a share, substantially bettering a loss of $89.2 million, or $2.28 a share, for the year-ago period.

U.S. sales for the first quarter were $2.1 billion, compared with $2.2 billion in the first quarter of fiscal 2005. U.S. comps, however, increased 1.5 percent vs. a year ago. Fiscal 2005 first quarter total sales of $3.4 billion include $1.2 billion related to A&P Canada, which was sold in August 2005.

Adjusted U.S. income from operations, which excludes restructuring, labor buyout, and other costs, was $2.6 million in the quarter versus a loss of $25.4 million a year earlier.

"We remained on course with our previously stated operating, merchandising and expense management strategies in the first quarter," said Eric Claus, president and c.e.o. "As a result, we again increased comparable store sales, reduced costs and thereby improved year over year EBITDA and operating income. Going forward, we will continue executing our strategic plan as we drive toward overall profitability."

Added Christian Haub, chairman: "Our management team is successfully executing our operating strategy and is achieving better than expected top and bottom line progress. These results, and our merchandising and store development plans going forward, increase my confidence that we are on track to achieve our goal of overall profitability in Fiscal 2007."

A keystone in the chain store development scheme is its fresh format, exemplified by its top-performing new format unit in Midland Park, N.J. The store is examined as the Store of the Month in Progressive Grocer's upcoming August 1, 2006 issue.

A&P shares closed at $22.63, up 3.6 percent.