Albertsons Q1 Sales Flat, as Asset Sale Approaches

BOISE, Idaho -- Albertsons sales and comps were essentially flat for its first quarter of fiscal 2006, which ended May 4--although the company did post a jump in quarterly net earnings thanks to higher gross margins.

Total sales for the quarter were $9.9 billion, essentially flat with last year's $10 billion. Total comparable store sales decreased 0.1 percent and total identical store sales decreased 0.2 percent. The retailer noted, however, that comparable store sales were positive in the core operating areas and the drug division, while comparable store sales in the non-core operating areas were negative.

Reported net earnings from continuing operations were $166 million or 44 cents per share compared to $107 million or 29 cents in last year's Q1. This year's first quarter results were positively impacted by higher gross margins and lower expenses, including a pre-tax gain of $47 million or 8 cents per share, net of tax, for planned pension curtailments approved during the quarter.

Gross profit reached $2.843 billion or 28.61 percent of sales, versus $2.810 billion, an increase of $33 million over last year. This increase was driven by successes achieved in the use of new pricing optimization software, retail shrink reduction, and supply chain expense reduction initiatives.

During the quarter the chain opened eight new stores, closed 18 and remodeled 20. A total of 2,461 stores were open at the end of the quarter.

Albertsons operates approximately 2,500 stores in 37 states across the U.S. and employ approximately 240,000 associates. Its banners include Albertsons, Acme, Shaw's, Jewel-Osco, Sav-on Drugs, Osco Drug, and Star Market, as well as Super Saver and Bristol Farms, which are operated independently.
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