Operating profit at Harris Teeter for both the fourth quarter and fiscal year of 2011 benefited from reductions in Selling, General and Administrative Expenses as a percentage of sales of 25 basis points and 34 basis points, respectively. Harris Teeter has successfully mitigated the impact of pressures on gross profit margins through continued emphasis on cost controls.
Operating profit was impacted by new store pre-opening costs of $7.0 million (0.16% of sales) and $8.4 million (0.20% of sales) in fiscal 2011 and 2010, respectively. Pre-opening costs for the fiscal fourth quarter of 2011 and 2010 were $1.7 million (0.15% of sales) and $1.8 million (0.16% of sales), respectively. New store pre-opening costs fluctuate between reporting periods depending on the new store opening schedule and market location.
Thomas W. Dickson, Chairman of the Board, President and Chief Executive Officer of Ruddick Corporation stated, “We are very pleased with our results for the quarter and the year. When viewed on a comparable week basis, we experienced positive comparable store sales as well as an increase in transactions, basket size and households in the quarter and for the year. We believe these positive results are the product of our continuing investment in price and promotion while, at the same time, offering outstanding customer service, thereby delivering superior value to our customers. We are also pleased that our customers recognize the value and quality of our store brands resulting in a higher growth rate in sales for these items than our growth rate in total sales for the quarter.
We are also pleased to have reached an agreement with KPS regarding their acquisition of A&E. This transaction allows the management team and their associates at A&E to continue to pursue their strategic plan of transforming A&E into a more Asian-centric enterprise, which has been years in the making. As A&E’s business has grown substantially in Asia it has become less of a domestic company and more of a complex international manufacturing company and its strategic fit with Harris Teeter has become less evident to our shareholders. This transaction enhances the strategic plan for Ruddick and Harris Teeter as the cash proceeds from the sale can be utilized for numerous purposes, including the acceleration of new store growth and the repayment of debt.”