NEWARK, N.J. – The Great Atlantic & Pacific Tea Co. (GAP) said Tuesday it would shed nearly half its 650 grocery stores, including its Midwest and Canadian operations, as it reported smaller fourth-quarter losses. A&P shares surged 26 percent in morning trading, their highest level in about three years.
A&P said the restructuring would leave the core of its operations in the Northeast, primarily in New Jersey and New York.
The company, which owns the A&P (search), Waldbaum's (search) and Food Emporium (search) stores, said it lost $5.7 million, or 15 cents per share, in the three months ended Feb. 26 from $59.9 million, or $1.56 per share, a year ago. Losses from continuing operations totaled 14 cents per share in the latest quarter.
Quarterly sales declined to $2.56 billion from $2.72 billion last year. Sales at stores open at least one year were flat compared to year-ago results. Analysts polled by Thomson Financial expected a quarterly loss of $1.01 a share and $2.47 billion in revenue.
For the 2004 fiscal year, the Montvale-based company reported it lost $188.1 million, or $4.88 a share, compared to $156.9 million, or $4.08 a share, for the prior year. Sales dipped slightly to $10.85 billion from $10.9 billion.
Analysts polled by Thomson Financial expected a fiscal year loss of $4.14 a share and $10.95 billion in revenue.
Chairman and CEO Christian Haub said the company has had strong U.S. sales, which were helped by the reorganization of its domestic business and other factors.
"Our significant improvement in the fourth quarter was produced by the sales and profit growth of A&P Canada, driven by our 'Fresh Obsessed' food marketing initiatives and the disciplined execution of our discount Food Basics operations," he said.
Meanwhile, the company's board has authorized a major restructuring under which the company will focus on growth in its core Northeast U.S. markets.
The company plans to explore the possible sale of its A&P Canada business, which comprises about 235 stores, all in Ontario, operating under the A&P, Dominion, Food Basics, The Barn and Ultra Food & Drug banners.
A&P also intends to divest its Farmer Jack and Food Basics operations and support facilities in Michigan and Ohio. Those states have 88 Farmer Jack stores; there are 25 Food Basics stores in New Jersey, New York, Michigan and Pennsylvania.
The company operates in 10 states, including Connecticut, Delaware, Massachusetts and Mississippi, and in the District of Columbia. Its store names also include Super Foodmart, Super Fresh and Sav-A-Center.
A&P shares rose $4.70, or 26 percent, to $22.97 in morning trading on the New York Stock Exchange, surpassing its 52-week high of $18.90.