Inflation, new stores and population growth help drive Publix Q1 sales

Inflation and new store openings were among several factors pushing Publix Super Markets' first quarter sales higher than last year’s.

Publix’s sales for the first quarter were $14.3 billion, an 8.2% increase from $13.2 billion in the first quarter of 2022, the grocer said on Monday in a press release.

Comparable store sales for the three months ended April 1 increased 6.4%, but “Considering approx. 4.5 CPI inflation, this is only around 2% sales growth in real terms,” said Shivendu Shivendu, an economist at the University of South Florida.

Net earnings for the three months ended April 1 were $1.2 billion, compared with $618 million in 2022, an increase of 100.8%, Publix said.

Much of this increase is attributable to numerous new store openings and Florida’s population growth, economists said.

“The large change in net Income has less to do with changes to operations or inflation and more to do with investment returns,” said James Farrell, an economist at Florida Southern University.

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“Quarterly operating profit actually fell slightly over the past year, however investment returns this quarter improved substantially, swinging from a $500M+ loss in 2022 to at $300M+ gain,” he said.

“This shift reflects the broader market returns where the investments fell substantially in early 2022 and have been recovering, albeit in a bumpy way, so far this year.”

Sean Snaith, director of the University of Central Florida’s Institute for Economic Forecasting, said, “I think there's a couple of forces at play here and both have to do with inflation.”

Inflation’s impact on purchases of at-home food played a role in raising revenues for Publix, he said. But also eating out at restaurants has risen in price. So people who are already dealing with higher rent and electric bills are cutting back on meals bought outside the home, and that means they visit grocery stores more often.

He also attributed higher revenues at Publix to the population growth in Florida, which had the fastest population growth in the nation last year.

“All these new Floridians have to eat as well, and many of them will end up being Publix customers,” Snaith said.

Farrell added, “In the bigger picture, based on the financial filings, Publix appears to be managing inflation fairly well, with the increasing costs being mostly offset by increasing revenues.

“With inflation slowing and the Federal Reserve appearing to pause interest rate increases, the challenge of maintaining profit margins should ease up a bit over the next year and allow businesses a clearer picture for additional investment and growth,” he said.

Publix also changed its stock price effective May 1.

Publix’s stock price increased from $14.55 per share to $14.97 per share, the grocer said. Only current Publix associates and members of its board of directors can buy stock, and it is not publicly traded.

“I’m proud of our associates, the owners of Publix, for continuing to make us a leader in our industry and providing a great shopping experience,” Publix CEO Todd Jones said in the press release.

Earnings per share for the for the first quarter increased to 37 cents per share, up from 18 cents per share in the same period a year ago, adjusted for the effect of the 5-for-1 stock split that occurred on April 14.

Earnings per share would have been 32 cents per share, compared to 31 cents per share in 2022, adjusted for the effect of the stock split, the company said.

“In terms of earnings per share, excluding investment gains and losses, it has increased very marginally from $0.31 per share to $0.32,” Shivendu said. “Most of the overall earnings growth, from $0.18 per share in 2022 to $0.37 per share in 2023 is due to an increase in investment income which is directly related to the stock market performance.”

“The stock price has increased from $14.55 to $14.97 which is only an increase of 2.8%. This is OK but is not great,” Shivendu said.

The Publix press release was based on unaudited financial statements the company filed on Monday with the U.S. Securities and Exchange Commission.

Lakeland-based Publix Super Markets Inc. is the largest employee-owned company in the U.S. with more than 240,000 associates. It operates 1,333 stores in Florida, Georgia, Alabama, Tennessee, South Carolina, North Carolina and Virginia. They plan to open new stores in Kentucky.

This article originally appeared on The Ledger: Publix's 1st-quarter sales rise 8.2%. Stock price rises 2.8%