BOISE, Idaho – Persistent economic sluggishness and continued fallout from the Southern California labor dispute slashed Albertsons Inc.’s second quarter profits by 36 percent.
The nation’s second largest food and drug retailer reported net income of $104 million, or 28 cents a share, on sales of $10.2 billion during the May-July quarter. That compared with earnings of $162 million, or 44 cents a share, on sales of $9 billion.
Albertsons shares fell 52 cents, or 2.1 percent, to close at $24.58 Tuesday on the New York Stock Exchange.
Second-quarter earnings were cut by 20 cents a share because of continued costs of the 41/2-month Southern California strike; the abandonment of the Omaha, Neb., and New Orleans markets; and covering a deficit in Northern California employee health and welfare plans.
Chairman Larry Johnston called the performance good “in a pretty tough food and drug retailing environment.” He remained optimistic about the future and reaffirmed the Boise, Idaho-based company’s projected 2004 earnings of $1.40 to $1.50 a share, despite first-half earnings totaling just 38 cents a share.
Johnston said he expects to broader consumer recovery across the country even the company has been “in a little bit of a ditch in the last 60 days.”
“Energy is a dimension of that. There are a lot of things going on out there, including an election, but we don’t think that is going to sink the recovery,” Johnston told analysts
Comparable-store sales during the quarter were up just two-tenths of a percent, excluding the Southern California market, which dragged comparable store sales 1.3 percent below the second-quarter 2003 results.
Associated Press
Striking workers shout at a customer as she leaves an Albertsons supermarket in Westchester, Calif., in February.
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