The Penn Traffic Company (Nasdaq:PNFT) announced yesterday that same store sales for the third quarter ended October 28, 2000 decreased 0.1% from the comparable prior year period. (1)
“We are pleased with our sales performance in the third quarter considering the slowdown in consumer spending that we believe has occurred in our markets,” said Joseph V. Fisher, President and Chief Executive Officer of the Penn Traffic Company.
The Company expects to report its third quarter financial results on December 6, 2000.
The Company does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Assumptions and other information that could cause actual results to differ from those set forth in the forward-looking information can be found in the Company’s filings with the Securities and Exchange Commission, including the Company’s Form 10-Q.
The Penn Traffic Company operates 220 supermarkets in Ohio, West Virginia, Pennsylvania, upstate New York, Vermont and New Hampshire under the “Big Bear,” “Big Bear Plus,” “Bi-Lo,” “P&C” and “Quality” trade names. Penn Traffic also operates wholesale food distribution businesses serving 83 licensed franchises and 78 independent operators.
(1) Existing generally accepted accounting principles do not provide specific guidance on the accounting for sales incentives that many companies offer to their customers. The FASB Emerging Issues Task Force (EITF), a group responsible for promulgating changes to accounting policies and procedures, has issued a new accounting pronouncement, EITF Issue Number 00-14, “Accounting for Certain Sales Incentives,” which addresses the recognition, measurement and income statement classification for certain sales incentives offered by companies in the form of discounts, coupons or rebates.
The implementation of this new accounting pronouncement will require Penn Traffic to make certain reclassifications between Total Revenues and Costs and Operating Expenses in the Company’s Statement of Operations. Penn Traffic expects to implement EITF 00-14 in the fourth quarter of the Company’s current fiscal year (the 53-week period ending February 3, 2001). In accordance with such implementation, Penn Traffic will also reclassify certain prior period financial statements for comparability purposes.
Penn Traffic expects that the implementation of EITF 00-14 will result in an equal decrease to the Company’s reported Revenues and Costs and Operating Expenses. Accordingly, while Penn Traffic is currently reviewing this pronouncement with its auditors and therefore cannot quantify the precise effect on reported Revenues, Costs and Operating Expenses or same store sales results, the Company believes that the implementation of EITF 00-14 will not have an effect on Penn Traffic’s reported Operating Income, EBITDA or Net Income (Loss). The Company currently expects that the implementation of this new accounting pronouncement will result in a reduction to the Company’s same store sales trends for the first three quarters of the Company’s current fiscal year (13-week periods ended April 29, 2000, July 29, 2000 and October 28, 2000) from that reported under the Company’s existing income statement classifications due, in part, to the increased promotional allowance opportunities which the Company’s vendors have made available to the Company in the current fiscal year as compared to the prior year.