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Harris Teeter falls short in 1Q

MATTHEWS, N.C. (AP) -- Harris Teeter Supermarkets Inc. reported Thursday that its fiscal first-quarter net income jumped nearly 67 percent as it wasn't weighed down by unusual costs of the prior year.

The specialty grocery reported after the market closed that it earned $22.8 million, or 46 cents per share, for the quarter that ended Jan. 1. That's compared with $13.7 million, or 28 cents per share, earned in the same quarter last year. The prior year's results included an $18 million cost to settle some pension liabilities and employee benefits in connection with the sale of its industrial thread manufacturing company.

Harris Teeter's total revenue increased nearly 4 percent to $1.16 billion from $1.12 billion. Its revenue from stores open at least a year, a key measure of financial performance as it strips away recently opened and closed sites, increased 2.5 percent.

The quarter fell short of market expectations. Analysts polled by FactSet were expecting the company to earn 59 cents per share on revenue of $1.18 billion.

Harris Teeter said that aggressive pricing by competitors and an overall sluggish retail environment is weighing on its performance. The grocery industry has grown more competitive since the recession hit as chains must vie for consumer's more limited food budgets.

The company said its management team remains cautious in its expectations for fiscal 2013 due to the current economic environment. It said it will continue to refine its merchandising strategies to respond to changing shopping demands.

Harris Teeter said it plans to open nine new stores during the remainder of its 2013 fiscal year, complete eight major remodels and reopen one store in Washington DC that was damaged by flooding. It operated 211 stores as of Jan. 1.

The company, based in Matthews, N.C., operates stores in eight states in the southeastern and mid-Atlantic United States.

Shares fell 9 cents to close at $41.19, in line with broader market trends, and were unchanged in after-hours trading.