Price Co., the San Diego-based operator of 40 Price Club discount warehouses, reported strong gains in profits and sales for the fourth quarter and fiscal year ended Aug. 28.
Net income for the fourth quarter was $24.1 million, up 26% from the $19.1 million reported for the same quarter a year ago. Sales were $985.6 million, up 25% from the $786.5 million reported for the year-ago period.
For fiscal 1988, Price reported a 29% increase in net income and a 25% increase in sales.
Profits for the year were $94.8 million, up from $73.3 million last year. Sales for the 12 months totaled $4.05 billion, up from $3.24 billion in fiscal 1987.
Sales at stores open a year or more increased 13% over the fourth quarter and by 5.5% over the entire year, the company said in a prepared statement. The improvement in the quarter’s comparable sales figures reversed a trend earlier this year that saw same-store sales’ growth percentages shrink to as low as 3% because of “cannibalization” of some existing outlets’ business by new Price Clubs in adjoining markets.
During the coming year, Price will open at least five and possibly as many as 10 more outlets, spokesman Daniel Carter said Tuesday, including warehouses in Mesa and Tucson, Ariz., Babylon, N.Y., and Corona. Over fiscal 1988, the chain added five outlets.
Ward Lindenmayer, a retail analyst with Sutro & Co., an investment firm in San Francisco, said Price’s financial performance in 1988 exemplified its superiority in the discount-warehouse field.
“Price is still clearly the best company in that industry in terms of volume, profit, financial strength and real estate value,” Lindenmayer said. He expects the company’s restructuring, which was announced last month and created chief operating officers for West and East Coast operations, to lead to more acquisitions.
Lindenmayer described Price’s pending $48.1-million acquisition of Alfred M. Lewis, a Riverside-based grocery distributor and wholesaler, as a “good real estate play.” A successful tender offer for Lewis, which is scheduled to close Oct. 20, will leave Price with at least five suitable locations for new Price Clubs.
Those Lewis locations, all used now as grocery distribution hubs, are in Northridge, National City, Riverside, Phoenix and Las Vegas. As for its plans for Lewis buildings, Price’s Carter said only that Northridge “would be attractive” as a future Price Club location.
Price Co. stock closed down $.75 at $39.25 in over-the-counter trading Tuesday.