BOISE, Idaho – Albertson's Inc. reported a 2.3 percent profit rise for the third quarter, despite increasing economic pressures and aggressive competition from both traditional grocery retailers and supercenters. The results met Wall Street expectations.
The nation's second largest food and drug retailer said Tuesday that profits were $176 million, or 43 cents per share, for the three months ended Nov. 1, compared with $172 million, or 41 cents per share.
Excluding restructuring charges of $1 million, its profit amounted to 44 cents per share, which matched the consensus from analysts polled by Thomson Financial/First Call.
Sales rose 4.1 percent to $9.4 billion from $9.0 billion a year ago.
Sales at stores open at least a year, known as same-store sales, were up 2.3 percent, while total sales were up 1.7 percent. Same-store sales are the best indicator of a retailer's strength.
Larry Johnston, chairman and chief executive, said the company, which has 2,500 stores in 36 states, has made significant progress in reducing controllable expenses, cutting management and administrative jobs, consolidating offices and upgrading technology.
In July, the supermarket giant announced it would close 165 stores and eliminate up to 20 percent of managerial and administrative jobs above the store level. The cuts are aimed at reducing operating costs as the chain struggles with its 1999 acquisition of American Stores.
"The company is on track to reduce costs by $250 million by the end of the second quarter 2002," Johnston said in a statement. "We expect to meet the current Wall Street earnings per share consensus of 56 cents for the fourth quarter."
For the first nine months, the company reported $211 million in profits, or 52 cents a share, on $28.3 billion in sales compared to $545 million in profits, or $1.29 a share, on $27.2 billion in sales for the same period last year.
The Albertson's board also authorized repurchase of another $500 million in common stock.
During the third quarter, Albertson's closed 38 food or drug stores, while at the same time remaining committed to a $1.9 billion capital expenditure program.
It opened 24 new food stores, 24 new drug stores and 15 new fuel centers during the third quarter on the way to meeting its goal of 210 new facilities before the end of the fiscal year. Another 105 stores are being remodeled.
Shares of Albertson's rose 26 cents, to close at $33.80 in trading Tuesday on the New York Stock Exchange.