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Publix Bags 8% Profit Boost Amid Downturn

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By MICHAEL SASSO

The Tampa Tribune

Published: May 2, 2008

TAMPA - Even in a down economy, Publix Super Markets keeps churning out strong financial reports.

In fact, in some ways the company may benefit from the economy, as customers trade down from brand-name products into cheaper store-brand items, which carry higher profit margins for retailers, said Chuck Cerankosky, a grocery industry analyst with FTN Midwest Research in Cleveland.

On Thursday, Lakeland-based Publix reported that its profit rose 8.1 percent for the first quarter of 2008 when compared with the same quarter last year.

The company earned $343.2 million, or 41 cents a share, in the first quarter compared with profit of $317.6 million, or 38 cents a share, in the same quarter of 2007.

The company's sales in the first quarter grew by 6 percent, rising to $6.2 billion from its year-ago sales of $5.9 billion.

Sales at stores open for at least a year, labeled comparable-store sales, rose 3.6 percent.

Nonetheless, Publix's stock still fell to $19.45 a share from its previous price of $20.70 a share. Publix stock is not available for sale to the public and is available only to company employees and members of its board of directors.

Cerankosky said a poor economy can be mixed bag for supermarkets. On one hand, customers may stop purchasing pricey items such as better wines and flowers, which can hurt grocers. On the other hand, supermarkets can profit from customers forgoing trips to the restaurant in favor of buying prepared foods at the store. Also, some grocers are seeing their sales of store-brand products surge as customers give up pricier brand-name products, he said.

Reporter Michael Sasso can be reached at msasso@tampatrib.com or (813) 259-7865.

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