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Labor dispute takes bite out of Albertsons' profit

By The Associated Press

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The nation's second-largest food-and-drug retailer reported a profit of $36 million, or 10 cents a share, on revenue of $8.7 billion for the quarter. That compared with a profit of $172 million, or 47 cents a share, on sales of $8.9 billion a year earlier.

The per-share earnings were affected by a one-time charge for discontinuing operations in New Orleans. Excluding that 5-cent offset, the company's first-quarter performance would have exceeded Wall Street expectations of 11 cents a share as determined by Thomson First Call's survey of analysts.

In late April, the company predicted a first-quarter profit between 10 and 12 cents a share.

The 4-<133>1/2-month labor dispute cost the company $386 million in lost first-quarter sales and 27 cents a share in reduced earnings. The combined fourth- and first-quarter impact was more than $1 billion in lost sales and more than 50 cents a share in lower profits.

There also were 4 additional cents in first-quarter charges related to legal, employee compensation and reorganization expenses.

The impact of the labor dispute during the first quarter was initially anticipated at 32 cents a share, and Chairman Larry Johnston credited a marketing campaign that cost $70 million in incentives and other promotions during the quarter for blunting the effect.

"We've seen a substantial recovery" in the latter part of the quarter, Chief Financial Officer Felicia Thornton told analysts.

"We not only expect to get back to where we were," Johnston said, "we expect our sales to grow."

Excluding Southern California, however, the company reported same-store sales were up just 0.3 percent for the quarter.

Albertsons stock closed up 36 cents at $23.93 yesterday.

Copyright © 2004 The Seattle Times Company

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