Efficiency gains from TOPS Holding Corp.’s acquisition of bankrupt fellow US retailer Penn Traffic has helped the company book a second-quarter profit and narrow half-year losses.
The company, the parent of Tops Markets, yesterday (29 August) reported net income of US$293,000 for the 12 weeks to 16 July. A year earlier, the company filed a net loss of $8.9m.
Second-quarter operating income almost trebled, rising from $5.3m a year ago to $14.9m.
Tops’s operating expenses were lower in the second quarter of the year, which the retailer said was due to “synergies” from the acquisition of Penn Traffic in January. Net sales were up 3.3% at $559.5m. Supermarket sales, excluding fuel, inched up 0.1% due to the contribution of new stores. However, same-store sales dipped 1%, which Tops said was due to the timing of Easter this year.
CFO Rick Mills said: “We generated a significant improvement in our operating income on modest sales growth, clear evidence of the progress we have made gaining synergies from the Penn Traffic acquisition, lowering our cost structure and improving productivity.”
He added: We continue to identify additional opportunities to improve operating efficiencies that will enhance our cash-generating capability, which will strengthen our balance sheet and better position the company for future growth.”