A&P Posts Mighty Loss After Exiting Midwest Market - TheStreet

A&P Posts Mighty Loss After Exiting Midwest Market

The grocer records hefty costs tied to efforts to focus on the Northeast market.
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A&P's

(GAP)

second-quarter loss swelled as the grocer absorbed costs related to its efforts to shift its focus to the Northeast market.

The New Jersey-based operator of chains such as A&P, Food Emporium and Waldbaum's said Friday that its loss widened to $43.2 million, or $1.03 a share, from $6.1 million, or 15 cents a share, a year earlier.

Excluding discontinued operations, the loss totaled $26.1 million, or 62 cents a share, compared with $8.6 million, or 21 cents a share, last year.

The discontinued operations are related to A&P's operations in the Midwest, where the company is exiting its business as part of an effort to focus on the Northeast region. As part of that endeavor, the company sold many of its Farmer Jack stores in the Midwest to

Kroger

(KR) - Get Report

, and it agreed to acquire smaller chain

Pathmark

(PTMK)

to expand in the New York-New Jersey area.

A&P said its adjusted loss from operations from its Northeast operations totaled $3.5 million, compared with $2.5 million a year earlier.

The company's second-quarter sales slipped slightly to $1.987 billion from $1.994 billion, but topped Wall Street's expectation of $1.89 billion. At the core Northeast operations, sales rose to $1.68 billion from $1.65 billion, with same-store sales increasing 1%.

"Although total company sales for the quarter were impacted by the winding down of our since-closed Midwest operations, we are pleased with our performance in the Northeast market," said President and CEO Eric Claus. "Our core businesses posted positive comparable store sales and improved gross margins -- attributable to more effective merchandising, more profitable fresh product distribution, good returns from our new Fresh stores, and strong improvement in our discount Food Basics group."

Shares recently were up 19 cents to $34.29.