Company reports ongoing operating loss of $1.06 per share with EBITDA of $41 million for third quarter 2002.

Montvale, New Jersey, January 10, 2003: – The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP) today announced third quarter and year to date results for the 12 and 40 weeks ended November 30, 2002.

Sales in the quarter were $2.47 billion versus $2.53 billion in the third quarter of fiscal 2001. Comparable store sales increased 0.1%. Excluding amounts arising from the Company’s previously announced asset disposition program, ongoing operating loss per share in the quarter was $1.06, with EBITDA of $41 million, compared with ongoing income of $.15 and EBITDA of $92 million in fiscal 2001. Including these items, the third quarter loss per share was $.77, compared with a $2.34 loss per share in the third quarter of fiscal 2001. In accordance with FASB 109, no US income tax benefits have been recognized on the Company’s current year, third quarter results.

Sales for the 40 weeks year to date were $8.27 billion versus $8.46 billion in fiscal year 2001. Comparable store sales increased 0.3% for the first 40 weeks of the year. The ongoing operating loss per share was $1.18, with EBITDA of $212 million, for the first 40 weeks of fiscal 2002 compared with income of $.09 per share and EBITDA of $282 million last year. The net loss including all items was $4.48 per share for 2002, versus a loss per share of $2.41 for 2001.

The ongoing operating loss of $1.06 per share for the third quarter excludes income of $.29 per share arising primarily from favorable experience in implementing the Company’s Asset Disposition Initiative.

Christian Haub, Chairman of the Board, President & Chief Executive Officer, said, “Our third quarter performance reflected the continued, difficult selling environment that has hampered results throughout our industry. With ongoing economic uncertainty dictating generally cautious spending and continued price emphasis by consumers, significant gross margin investments were necessary to protect market share. Results were also impacted by rising labor expenses, driven by the escalating costs of employee benefits. We do not anticipate any abatement of present margin and cost pressures in the near future.

“Recently, we changed our organization structure and appointed new management to head our U.S. and Canadian business units, to better position the Company to compete in this difficult environment. Given the different stages of development of the two units, we are focusing on distinct strategies appropriate to each of their trading environments.

“In Canada, we continue to emphasize and enhance the marketing, merchandising, customer service and operating disciplines that have driven our ongoing success. In the U.S., we are formulating a new business plan to address the internal and external challenges that have hampered our performance.

“Short-term, our structural and leadership changes are accelerating our efforts to reduce costs and eliminate redundant and unproductive activities, and focus on improving store level execution. In addition, we are evaluating all elements of our U.S. operations, and are prepared to make the tough decisions necessary to return the Company to profitability.”

Mr. Haub concluded, “As we go forward in the fourth quarter, I take some comfort in the fact that we achieved our expected results throughout the holiday selling season. However, the realization of sustained improvement remains ahead, and will require us to take decisive actions in all areas of the Company. I am confident that our actions will generate that improvement, and ensure a promising future for A&P.”

Founded in 1859, A&P was one of the nation’s first supermarket chains, and is today one of North America’s 10 largest. In the third quarter, the Company opened 8 new stores and remodeled or expanded 11 stores. The Company currently operates 692 stores in 15 states, the District of Columbia and Ontario, Canada under the following trade names: A&P, Waldbaum’s, The Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Kohl’s, Sav-A-Center, Dominion, The Barn Markets, Food Basics and Ultra Food & Drug. The Company also manufactures and distributes the Eight O’Clock line of whole bean coffees. The Company invites investors to listen to an audio Webcast of its quarterly discussion of earnings by accessing a link on the “Investor Relations” page of its Website, www.aptea.com. The live broadcast is on Friday, January 10 at 11 AM Eastern Time, with replays available from the afternoon of January 10 through January 24.

This release contains forward-looking statements about the future performance of the Company, which are based on Management’s assumptions and beliefs in light of the information currently available to it. The Company assumes no obligation to update the information contained herein. These forwardlooking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements including, but not limited to: competitive practices and pricing in the food industry generally and particularly in the Company’s principal markets; the Company’s relationships with its employees and the terms of future collective bargaining agreements; the costs and other effects of legal and administrative cases and proceedings; the nature and extent of continued consolidation in the food industry; changes in the financial markets which may affect the Company’s cost of capital and the ability of the Company to access capital; supply or quality control problems with the Company’s vendors; and changes in economic conditions which affect the buying patterns of the Company’s customers.

For financial questions, call William J. Moss
Vice President, Treasurer
(201) 571-4019

For non-financial questions, call Richard P. De Santa
Vice President, Corporate Affairs
(201) 571-4495

2002-3Q-Schedules.pdf - PDF - 47k
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