Operating profit at Harris Teeter increased by 24.8% to $44.2 million (4.93% of sales) in the first quarter of fiscal 2008 as compared to $35.4 million (4.45% of sales) in the first quarter of fiscal 2007 (an improvement of 48 basis points).
Operating profit was impacted by new store pre-opening costs of $3.7 million (0.41% of sales) and $5.0 million (0.62% of sales) in the first quarter of fiscal 2008 and fiscal 2007, respectively. New store pre-opening costs fluctuate between reporting periods depending on the new store opening schedule.
Harris Teeter's operating profit improved primarily as a result of increased store sales attributed to comparable store sales gains driven by our continuous attention to customer service, and through targeted promotional spending and retail pricing programs.
The sales increases along with a continued emphasis on operational efficiencies and cost controls have provided the leverage to offset the incremental costs associated with Harris Teeter's new store program (pre-opening costs and incremental start-up costs) and increased associate benefit costs, credit and debit card fees and other occupancy costs.
Thomas W. Dickson, Chairman of the Board, President and Chief Executive Officer of Ruddick Corporation commented that, "We are pleased to report another quarter of positive comparable store sales gains and operating profit increases at Harris Teeter during periods of increasing our overall store count. Our commitment to superior customer service and our company-wide execution of focused promotional programs enabled us to continue to grow our market share and our customer base."
A&E sales for the first quarter of fiscal 2008 were $80.1 million as compared to $84.5 million in the first quarter of fiscal 2007. Foreign sales accounted for approximately 55% of A&E total sales for the first quarter of both fiscal 2008 and fiscal 2007.
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