A&P Announces Continued Poor Performance for Fiscal 1st Quarter, Turnaround Plan

The Great Atlantic and Pacific Tea Company has announced disappointing financial results for the 2010 fiscal first quarter. Executive Board Chairman, Christian Haub combined the weak performance announcement with the naming of a new Chief Executive Officer, Sam Martin, formerly of Office Max and a new turnaround plan. Martin is A&P’s second CEO in six months and its fourth in less than a year. (See related story Click Here)

The first quarter results saw declines in key financial measures:

· Sales $2.6B down $200M. Comparable store sales down 7.2%

· EBITDA (Earnings before interest, taxes, depreciation and amortization) $19M vs. $81M a year earlier

· Adjusted loss from operations $51M vs. a gain of $4M in 2009

· Continuing operations loss of $116M vs. a $58M loss in 2009

The company’s turnaround strategy, which Martin is expected to execute, includes the following four components:

· Improve the company’ customer value proposition through merchandising

· Enhance the customer experience and drive clear brand identity

· Lower structural and operating costs; and

· Implement new financing initiatives to augment first quarter liquidity of $253M

Among these initiatives are tactical actions, which are expected to include the sale of non-core assets and the pursuit of sale-leaseback transactions.

Said Haub “Although we are clearly disappointed with our performance in the first quarter, we are confident that we now have the right leadership in place (Martin), to drive this operational and revenue-driven turnaround effort and make A&P a great company again. We are focused on improving our customer value proposition, as well as significantly reducing our structural and operating costs. Our progress on enhancing our customers’ experience across our store formats illustrates our commitment to moving forward aggressively. We remain steadfastly focused on taking actions necessary to position A&P for a strong future.”

For his part incoming CEO, Martin said, “I firmly believe that this turnaround will strengthen A&P’s operating foundation and improve our performance. I have faced similar situations in my career and have successfully navigated through them. We will move quickly to implement this turnaround for the benefit of all our stakeholders.”