Ralphs Posts $12.9-Million Loss Due to Special Charge

Ralphs Grocery, a majority-owned subsidiary of Campeau Corp., said Wednesday that it improved its operating losses in the third quarter, but a special charge of $7.7 million resulted in a net loss of $12.9 million.

The charge reflects a modification in the way the company accounts for certain intangible assets, the company said. Excluding special charges, the company lost $1.7 million less from operations compared to the year-ago period, a company spokesman said. That improvement and an 11% increase in cash flow indicate that the company’s store remodeling and expansion program is paying off, he said.

Sales for the third quarter rose 6.6% to $578 million from $542 million in the year-ago quarter, Ralphs said. Ralphs added one new store in the quarter, for a total of 10 new stores in the last 12 months. The company said it completed major remodeling of 10 stores in the 142-store chain during the quarter.

Expansion, remodeling and the transition of some large stores from a regional to a neighborhood format resulted in sales decreasing at some stores and increasing at others, Ralphs said. Stores not affected by such activities had comparable store sales increases averaging 4.6%, the company said. Remodeled stores not affected by ongoing activities had comparable store sales increases of 19.1%

Ralphs said comparable store sales for the total chain decreased one-half of one per percent in the quarter.

For the nine months, the grocery chain said it lost $25.5 million. Sales rose 6.7% to $1.74 billion from $1.63 billion in the year-ago nine months.

Ralphs Chairman Byron Allumbaugh said he expects the chain to have “outstanding results during the holiday season.”