Publix reports 60 percent growth in profit for third quarter

LAKELAND — Publix Super Markets Inc. continued to benefit from the nationwide surge in grocery sales stemming from the coronavirus pandemic, although at a slightly diminished pace.

The Lakeland-based grocery store chain posted $11.1 billion in sales revenue for its third quarter ending Sept. 26, an 18.3 percent increase from $9.3 billion in the third quarter of 2019, according to a statement released Monday. The company estimated $1.25 billion in third-quarter sales due to the COVID-19 pandemic, a 13.4 percent increase over the year.

Publix had reported a 21.8 percent sales revenue increase to $11.4 billion in this year’s second quarter. It attributed $1.5 billion in pandemic-related sales, or 16.1 percent.

The company also announced a 6.6 percent increase in its stock price to $57.95 per share from $54.35 per share in the second quarter.

Publix stock is not publicly traded and is held by current and former employees, including retirees and members of the board of directors.

Independent financial analysts determine the Publix stock prices based on a comparison of financial performance in a “peer group” of other supermarket chains: Ahold Delhaize, Kroger and Weis Markets. All three companies have not reported third-quarter results as of Monday.

Publix stores saw a 16.5 percent increase in same-store sales for the third quarter, down slightly from 20 percent in the second quarter.

Same-store sales measures performance at stores open at least one year, which factors out growth from more recently opened supermarkets. It is a widely used financial measure in the retail industry.

The company reported a stunning 60 percent increase in its third-quarter profit, rising to $917.6 million, or $1.31 per share, compared to $574 million, or 81 cents per share, in the third quarter of 2019.

Some of that increase came on paper from gains in the company’s investments during the recent third quarter compared to losses a year earlier. Excluding the impact from investments, Publix saw a profit of $836.2 million in the quarter, or $1.20 per share, a 44 percent increase from $580.3 million, or 81 cents per share, a year earlier.

“Publix is doing well relative to the industry, especially given its momentum coming into this year,” said Jon Springer, an industry analyst who writes for Grocery Business, an industry periodical and website.

He noted Albertsons Inc., a Boise-based supermarket chain operating in the West and North Atlantic U.S., posted a 13.8 percent gain in same-store sales for its recent quarter.

“(Publix’s) reputation for clean, safe stores is probably helping as is its location density and ‘one-stop’ shopping — people are making fewer trips to the store than they once did, buying more each time, and shopping around less,” Springer said. “That favors stores with wide selections and pharmacies like Publix and other full-selection supermarkets.”

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Springer said pandemic-related buying has remained strong because many schools and offices are closed or significantly curtailed.

“That puts people at home to consume more meals, such as breakfasts and lunches they might typically get done on the road,” he said. “Restaurants are still curtailed, so a few fewer trips to eat out each month, that’s more business for supermarkets.”

While some trends have abated, others have not, Springer said.

“The panic buying that sparked the initial run-up in sales during March wasn’t really sustainable in that one can only eat so much,” he said. “It’s really the share of the stomach moving from foodservice and entertainment to a greater percentage of meals consumed at home that have been supermarket’s best ally. These trends will continue to a degree while offices and schools and games and theatres and the other alternatives to meals consumed at home are curtailed.”

For the first nine months of 2020, which includes financial performance before the pandemic shutdown in March, Publix reported sales revenue of $33.7 billion, an 18.7 percent increase from $28.4 billion during the same period in 2019. It estimated $3.75 billion of those sales, a 13.2 percent increase, stemmed from pandemic-related buying.

Same-store sales increased 17 percent for the period.

Profit for the first nine months rose 33.2 percent to $3 billion, or $4.20 per share, compared to $2.2 billion, or $3.10 per share, the company reported.

Excluding the impact of investments, Publix would have seen a $2.8 billion profit, or $3.94 per share, for this year’s three quarters, the report said. That represents a 41.4 percent increase from $2 billion, or $2.74 per share, from the January-to-September period in 2019.

“Our associates' efforts to serve our customers, our communities and each other during this challenging time continues to be extraordinary,” CEO Todd Jones said in the statement. “I couldn’t be more proud of their hard work and dedication.”

Publix operates 1,254 supermarkets in seven Southeast U.S. states, including 814 stores in Florida. It also runs 9 manufacturing facilities in Florida and two plants in Georgia.

Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-802-7591.