Smith's Food & Drug Centers Thursday reported net income for the fiscal year ended Jan. 1 of $45.8 million or $1.52 per share, down from $53.7 million or $1.79 per share in fiscal 1992.
Sales for the year totaled $2.81 billion, up 6 percent over the previous year. Sales in comparable stores decreased 0.7 percent for the year. Smith's said that, if an adjustment were made for the additional week in fiscal 1992 (53 weeks vs. 52 in '93), the sales increase would have been 8 percent.Fourth-quarter sales totaled $727 million, up 6 percent over the same period a year earlier. Net income after tax was $9.9 million or 34 cents per share, down from $13.1 million or 44 cents per share reported last year. Sales in comparable stores decreased 2 percent for the quarter.
The company blamed the drop in net income and sluggish sales to "continuing pressure from opening new stores in the recession-plagued California market and the company's very aggressive pricing program in the Utah market."
Smith's said it expects the actions, coupled with lowering costs and greater mass in California, "will increase the company's earnings potential in the longer run but moderate earnings in the next few quarters."
The company said last week's earthquake in the Los Angeles area did not affect any of its 26 Southern California stores.
Last year, Smith's opened 11 combination centers in California, New Mexico, Texas and Utah, and five stores were remodeled. Smith's now operates 129 stores, up from 119 stores at the end of last year.
A Smith's spokesman said that, due to market conditions and "recessionary pressures" in California, it will cut back on its expansion plans for the next two years. Smith's said it expects to open 10 to 12 stores this year and in 1995, mostly in California, with the size of those stores scaled down to give them a lower break-even point and better return on investment.