Tops Markets’ grocery business got stronger as summer began.
The bankrupt supermarket chain’s core grocery business had its best month yet as summer began, reporting its fourth straight monthly operating profit, according to new documents filed with U.S. Bankruptcy Court.
The slow strengthening of Tops’ grocery business is a positive sign for the company, which filed for bankruptcy in late February and has been working to restructure its business ever since.
Tops has since resolved two key pension issues that were a significant long-term financial burden on the company. Tops still needs to finalize a deal with its secured bondholders to swap most of the company’s $700 million in debt for a majority ownership stake in the restructured supermarket company, and it is expected to close some of its underperforming stores.
Tops’ supermarket business has become steadily more profitable as it has moved through bankruptcy, freed from annual interest payments that topped $80 million a year.
Tops’ operating profits of $6.8 million equal 3 cents for every dollar of sales during the latest one-month reporting period, which ran from mid-June to mid-July. That was better than the 2 percent operating margin it had during the previous month and better than the roughly 1 percent margin for its operations since late February.
The operating profits also leave out $146 million in bankruptcy, restructuring and interest expenses. Add in those expenses and Tops had a $132 million loss since its February bankruptcy filing.
The financial information that Tops disclosed is limited in scope and doesn’t provide a way to compare the company’s current performance with how it did during the same period last year – vital information that investors use to evaluate the sales and profits of publicly traded companies.