A&P Nets $41M for Q3

At the same time, net income for Q3 was $41 million, or $4.97 a share, vs. a loss of $71 million, or $1.74 a share last year. But the net for the latest quarter was bolstered by a tax benefit of $45 million relating to finalization of the sale of the company's Canadian operations, announced in August 2005. Adjusted for that and other non-operating items, the loss for Q3 was $16 million compared to a loss of $21 million a year earlier. Net cash from operating activities was $25 million, the same as a year ago.

For the 40 weeks ended December 2, sales were $5.2 billion vs. $7.1 billion, although the latter included $1.7 billion generated by A&P Canada stores that are no longer part of the company. Comparable store sales were marginally lower (0.2%), although comparable store sales were up by .7% in the chain's core Northeast markets.

Net to date for three quarters was $34 million, or $.81 per share, compared to $431.7 million, or $10.62 per share. The latter number was skewed, of course, by the proceeds of the sale of A&P Canada. Excluding certain non-operating items, the adjusted three-quarter US loss from operations announced yesterday was $19 million compared to $68 million a year earlier. Net cash year-to-date was $117 million, up from $86 million in 2005.

"We're pleased with A&P's progress in the third quarter toward our goal of sustained profitability," Christian Haub, executive chairman of the company's board, told analysts yesterday. "Although our sales performance was impacted by difficult comparisons to prior results, we made solid progress, especially in our core Northeast market.

"We made significant investments, and these actions will contribute to sales and earnings growth in the future," Haub continued. "We achieved our sixth consecutive quarter of improved earnings, due in good measure to our merchandising evolution, operating discipline and ongoing expense controls."

"I'm pleased with our progress as we remain on track for our long-term strategic development and value creation," added Eric Claus, A&P's president/CEO. "The renewal of our stores has accelerated - we converted 11 stores to our new Fresh format, for example. Some disruptions inherent in remodeling impacted volume in some locations, but we've consistently achieved renewed growth as work was completed. We look ahead to an additional lift as we continue adding new generation fresh, discount and gourmet stores in our core markets."