Profits rebounded substantially for Drug Fair Inc. in the fiscal year ended Jan 31 as sales rose 11 percent to $296 million, the 176-store retail chain reported yesterday.
Drug Fair, an Alexandria company whose directors recently approved a takeover bid by Gray Drug Stores Inc. of Cleveland, listed profits of $1.4 million (84 cents a share) in the recent 53-week period compared with $754,374 (45 cents) a year ago.
Fourth-quarter sales rose 15 percent to $87 million but earnings declined during the three months to $658,087 (39 cents) from $915,532 (54 cents), partly reflecting what retail analysts have called sharp promotional price-cutting by area retail chains to maintain volume during holiday selling season.
A year ago, Drug Fair suffered a loss of more than $1 million from discontinued businesses. In the recent year, losses from discontinued operations amounted to $189,000, and President Milton Elsberg noted yesterday that his company's earnings were adversely affected by legal expenses associated with a suit attacking Drug Fair's profit-sharing plan, which was dismissed in federal court, by losses from a fire that destroyed the Arlington Towers store and by a 40 percent increase in inventory carrying costs.
Drug Fair stockholders will be asked to approve the Gray Drug acquisiton at a special meeting in the next six weeks, Elsberg said yesterday. Gray has offered $20 a share for stock of the local firm, which would be operated as a subsidiary under its current name if the deal is approved.
Directors of Drug Fair also approved a regular quarterly dividened of 10 cents a share, payable June 1 to owners of record May 13.
Marriott Corp., a Bethesda hotel, restaurant and airline-catering firm, reported a 14 percent increase in first-quarter profits to $14.1 million from $12.7 million in the same period a year ago as sales jumped 18 percent to $413 million. On a per-share basis, Marriott profits rose to 54 cents from 40 cents, a sharper gain that reflects fewer shares outstanding after the company bought 7.9 million of its common shares in 1980.
President J. W. Marriott Jr. attributed the first-quarter increases to substantial improvements in the company's contract food service and restaurant operations and to higher earnings at hotels -- with sales up 25 percent and profits up 9 cents.