Disappointing sales at its Gemco discount department store unit and intense competition at its southern food division resulted in a sharp drop in Lucky Stores' second-quarter earnings from a year ago, the company said Monday.
The Dublin, Calif.-based retailer, which also operates Lucky supermarkets, said earnings for the three months ended Aug. 3 fell to $15.6 million from $25.2 million last year. Sales were $2.32 billion, up from $2.31 billion last year.
The company attributed the earnings decline primarily to Gemco, "where sales, already below expectations, slumped further in July." Lucky said gross margins were reduced by promotional markdowns and by "excessive" inventory shrinkage.
In addition, the company said, sales gains at its southern food division, which includes supermarkets in Southern California, Nevada and Arizona, were limited by intense competition.