Grocery retailer Pathmark Stores has announced an increased loss for its third quarter ended 29 October 2005, hit by one off charges and the effects of increased oil prices and medical and insurance expenses.
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Sales for the third quarter were US$980.5m, an increase from US$979.9m in the prior
year’s third quarter. Same-store sales decreased 0.6% in the third quarter. The company reported a net loss of US$18.3m in the third quarter compared to a net loss of US$3.6m in the prior year’s third quarter. The decrease was due to an US$11.8m decrease in Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), a merchandising and store initiative charge of US$4.2m, a store labour buyout charge of US$3.6m, and a separation agreement charge of US$1.6m.
Adjusted EBITDA decreased from US$31.4m to US$19.6m due to US$4.9m of incremental shrink as a result of the merchandising and store initiative and approximately US$6.0m in higher expenses due primarily to increases in oil prices and medical and insurance expenses, the company said.
“Pathmark made significant progress in the quarter by completing its initial merchandising and store initiative,” said CEO John Standley. “In each of our 142 stores, we expanded our perishable selections, introduced new merchandise categories such as party goods, kitchen items, dollar merchandise, and toys, and improved the appearance of our stores both inside and out. While we are confident that our increased focus on perishables will be beneficial, significantly higher inventory shrink in the perishable departments impacted our quarter’s results. We believe this shrink result is transitory and have taken steps to normalize it by the end of the current quarter. Additionally, we continue to evaluate and challenge all elements of our business to improve operating performance.”
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By GlobalData
