New York City Duane Reade said on Tuesday that in light of the current economic conditions, it is implementing a cost-savings program that includes hiring and wage freezes.
For the fourth quarter, total net sales rose 7.6% to $464.5 million from $431.6 million in the year-ago period. Net retail store sales, which exclude pharmacy resale activity, increased 3.4% to $428.6 million. Total same-store sales increased 2.4%, with a front-end same-store sales increase of 1.5%. Pharmacy same-store sales increased 3.6%. Net loss for the quarter totaled $17.4 million, compared with $15.1 million in the previous year.
Operating loss for the quarter totaled $3.6 million, compared with operating income of $1.2 million in the year-ago period. The current quarter includes a $3.5 million litigation settlement charge and an increase in other expenses.
In an effort to curb costs, the chain is implementing a cost-saving program that includes hiring and wage freezes in administrative and certain other areas of the business, as well as the implementation of a number of strategic cost-saving initiatives to improve efficiency and eliminate non-value added activities. The moves are expected to result in a cost savings of between $7 million and $10 million in 2009.
"We are encouraged by our solid performance in 2008 despite increasingly difficult economic conditions during the latter months of the year. Due to these conditions, we are taking steps to reduce our cost structure in 2009 and will continue to assess the impact of macro factors on our business," said John Lederer, chairman and CEO, who noted that the company remains "cautiously optimistic" in its 2009 outlook.