Mr. Mariano continued, “Recognizing that the economy and competitive environment are likely to remain challenging into fiscal 2013, we are reducing our quarterly dividend to strengthen our balance sheet and increase our financial flexibility. We believe that it is in the best long-term interest of our shareholders as it will enable us to continue to invest in the business and expand our growth banner, Mariano’s, in the Chicago market, as well as provide cash flow to pay down debt. Our new dividend policy will continue to provide for a dividend pay-out as a percentage of net income and dividend yield that is very attractive relative to our peers.”

Financial Results for Third Quarter of 2012

Net sales for the third quarter of 2012 were $973.6 million, a decrease of $3.3 million, or 0.3%, from $976.9 million for the third quarter of 2011. The decrease primarily reflects a 3.6% decrease in same-store sales, partially offset by the impact of new stores. The decline in same-store sales was primarily due to a 3.0% decrease in the number of customer transactions and a 0.7% decrease in average transaction size. Same-store sales comparisons were negatively impacted by the increased effect of competitive store openings and related pricing and promotional activity in certain of our markets as a result of the continuation of a challenging economic environment for our customers, as well as the performance of certain promotional programs which did not perform as well as last year. In addition, we did experience deflationary trends, some of which were related to pricing and promotional activity, in several key product categories that also negatively affected our same-store sales.

Gross profit for the third quarter of 2012 decreased 4.6% to $251.2 million, from $263.2 million in the third quarter of 2011. Gross profit as a percentage of net sales was 25.8% for the third quarter of 2012, compared to 26.9% in the third quarter of 2011. The decrease in gross profit as a percentage of net sales primarily reflects greater price and promotional investments in certain markets and increased shrink as a result of warm weather conditions.

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