Springtime was a good time for the parent company of Tops Markets.
The supermarket chain’s profits improved sharply to $9.5 million, compared with modest earnings during both the previous quarter and the spring of last year.
Tops executives said Tuesday they were pleased with the company’s second-quarter performance, crediting “better than expected” results from its new and remodeled stores, along with the chain’s cost-cutting efforts and a 1.6 percent increase in sales at stores open for at least a year.
Tops Holding Corp.’s profits jumped to $9.5 million, compared with $300,000 a year ago, as overall profitability strengthened and sales improved, mainly because of the timing of its popular Monopoly promotion and the traditionally slow week after Easter shopping period, which fell during the first quarter of this year and the second quarter of 2011. The Monopoly promotion ran from April to July this year to coincide with the week after Easter, rather than from January to April, as it did last year.
“Timing played a factor,” said Rick Mills, Tops’ senior vice president and chief financial officer, during a conference call.
The supermarket chain’s total sales rose by less than 1 percent to $562.4 million from $559.5 million, with grocery sales rising by 0.3 percent, while gasoline sales increased by 2.1 percent.
Tops said it sold 5.5 percent more gallons of gasoline during the quarter, mainly because it has added five new fueling stations since July 2011. That helped offset a 3.2 percent dip in the retail price of the gasoline. Tops is adding three more gas stations at stores in the Syracuse and Rochester markets.
The overall increase in grocery sales also was depressed because Tops sold or closed five former Penn-Traffic stores last year or early this year that contributed nearly $10 million in revenues during 2011’s second quarter.
Inside sales also were hurt by the shift from brand-name to generic prescriptions, which reduced the growth in same-store sales by half a percentage point.
Tops was able to increase its profits in spite of the relatively flat sales because it reduced its operating expenses by more than 2 percent. More than half of the savings came from a $1.9 million reduction in utility expenses, mainly from lower electricity costs.
Frank Curci, Tops’ president and chief executive officer, said he has high hopes for the 21 Grand Union supermarkets it agreed last month to acquire in upstate New York and Vermont.
“They’re good, profitable stores,” he said. “They’re mostly one-horse towns, with smaller stores and lower volumes.”
Curci said Tops has no immediate plans to shift those stores from the Grand Union brand.
“Since, for the majority of these stores, the Tops name is not known, we’d like to go in and operate them for a while,” Curci said, noting that the savings from such a switch would be limited. “We’re not going to change the names out of the box. We’ll evaluate that as we go on.”