Operating losses in the foodservice segment year-to-date were higher than in 2000, largely as a result of California restructuring expenses.
Overall company business increased from the prior year quarter to $464 million, a 4.6 percent gain. Cash-and-carry store sales climbed 5.1 percent, with comparable store volume up 4.0 percent for the quarter.
Net income for the quarter was $4.5 million, an improvement of 40 percent from $3.2 million in the prior year quarter. Earnings from store operations climbed as a result of strong sales growth and improved gross margins resulting from a national purchasing program, partially offset by increased marketing expenditures and electricity costs. In foodservice, restructuring activities in both Florida and California were cited as improving operational efficiency and customer service.
"We?re pleased to report improved earnings in the company?s core store operations," comments Ross Roeder, Smart & Final chairman and ceo. "Sales increases showed good growth, particularly in light of the company?s exceptional sales growth in the prior year quarter. The second quarter increases in gross margins again reflected the success of our national purchasing efforts and improving distribution efficiencies.
"Although increases in electricity rates are a challenge, their operational impact has been moderated by our conservation program and other cost reduction measures," Roeder added. "However, we continue to be concerned about the cost and availability of power for he remainder of the year and its potential impact on the California economy."