Vons Posts a $15.2-Million Profit in Its First Quarter

The recovery by Vons Cos. supermarket chain gained steam in the first quarter. The company posted a profit of $15.2 million, a turnaround from a loss of $13.4 million a year earlier.

It was the second consecutive profitable quarter for El Monte-based Vons, which suffered heavy losses for more than a year after buying Safeway’s Southern California stores in August, 1988. In fact, the first-quarter profit was boosted by $7 million because of tax benefits related to the company’s losses in 1988-89.

The earnings turnaround came despite a modest 2.6% sales increase, to $1.21 billion, during the quarter ended March 25. Vons noted that its revenue gain was held down because Easter sales were included in the first quarter last year but will be in the second quarter this year.

Vons, the biggest supermarket chain in Southern California with a market share of roughly 25%, attributed its improved bottom line largely to cuts in staffing and the progress it has made in merging its operations with those of the old Safeway stores. Sarah A. Stack, an analyst with Bateman Eichler, Hill Richards, said the company is using its expanded bargaining power and storage capacity to buy products more cheaply.

The company released its earnings after the close of stock trading. On the New York Stock Exchange Monday, Vons’ shares finished at $20.75, unchanged from Friday’s close.