Supermarket Gains Cited as Lucky Profit Jumps 50%

Lucky Stores Inc. on Monday reported higher first-quarter earnings and revenue, which the company attributed to better-than-expected performance by its California supermarkets.

The Dublin, Calif., supermarket chain said first-quarter profit from continuing operations was $30.2 million, up 50% from the same quarter last year.

Revenue from the continuing food store operations rose to $1.75 billion for the three months, an increase of 12% from a year earlier.

Lucky said net income, which included discontinued operations, rose 148% to $52.4 million from the same 1986 period. The 1987 total included after-tax gains on the sale of assets, principally Yellow Front Stores, and $5.9 million net income of the Hancock Fabrics subsidiary, which was spun off to Lucky stockholders immediately after the quarter ended. Net earnings for the 1986 quarter included $1 million from discontinued operations.

“The earnings increase, which came primarily from our California stores, was greater than expected,” said Chairman John M. Lillie. “The positive impact of the Gemco closing on sales and margins has been substantially stronger than we anticipated. Modest increases in other operating regions included another strong performance by our Florida division.

“In the Midwest, where sales have been below expectations in several key markets, earnings continue at less than acceptable levels,” he said. “We look for an early resolution of the labor issues which have had an unsettling effect on our operations in that division throughout the quarter.”

Lucky discontinued its Gemco, Automotive, Yellow Front and Hancock Fabrics units as part of a restructuring program begun last year during the hostile takeover attempt by New York investor Asher B. Edelman.