Supermarkets operator The Great Atlantic & Pacific Tea Co., Inc. (GAP), Tuesday reported a wider loss for the third quarter of fiscal 2010, reflecting a decline in revenues due to lower spending by the consumers and impairment charges related to goodwill, trademark and long-lived asset. Follwing the results, the company's shares are trading down about 20%.
The Montvale, New Jersey-based company's loss from continuing operations for the third quarter widened to $502.44 million or $12.85 per share from $3.78 million or $1.62 per share last year. Results include charges of $412.6 million for goodwill, trademark and long-lived asset impairment and $16 million for mark-to-market adjustments related to financial liabilities.
Net loss for the quarter widened to $559.57 million or $14.35 per share from $14.41 million or $1.90 per share in the previous year.
On average, three analysts polled by Thomson Reuters expected the company to report loss of $0.72 per share for the quarter. Analysts' estimates typically exclude special items.
Total sales for the quarter declined to $1.96 billion from $2.12 billion in the comparable quarter last year. Comparable store sales for the quarter decreased 5.8%. Analysts estimated sales of $2.07 billion for the quarter.
Commenting on the results, Christian Haub, executive chairman of the board, said, "The US food retail market continues to face one of the most difficult and challenging environments in many years which analysts expect will extend through the first half of 2010."
"Unemployment, deflation and the resulting price competition combined with consumers' drastic changes in spending behavior has severely impacted both our industry and our business," Haub added.
Gross margin was $590.58 million for the quarter, compared to $660.38 million in the prior-year quarter.
Non-operating loss for the quarter was $15.94 million, compared to an income of $22.78 million last year. Interest expense increased to $45.77 million from $37.51 million in the previous year.
For the nine-month period, net loss widened to $705.05 million or $25.42 per share from $31.25 million or $3.18 per share in the same period of the previous year. Total sales for the period declined to $6.82 billion from $7.23 billion a year ago.
GAP is currently trading at $12.88, down 2.56 or 19.88%, on the NYSE.
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