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Albertson's Reports 1.2 Percent Increase in 4Q Sales, Announces Market Exits

BOISE, Idaho - Albertson's, Inc. on Wednesday reported sales of $9.7 billion for the fourth quarter ended Jan. 31, 2002, a 1.2 percent increase from last year's final quarter. Net earnings including restructuring and other items increased 32 percent to $290 million, or $0.71 per diluted share compared to $220 million, or $0.54 per diluted share last year.

Cash flow from operations in the fourth quarter of Fiscal 2001 totaled $523 million, an increase of $300 million compared to the same quarter last year. "We are pleased with the progress of our company's revitalization efforts which have resulted in our consistent performance over the past four quarters," Larry Johnston, chairman and CEO, said. "During the fourth quarter, in a tough sales environment we not only achieved but exceeded our earnings projections by focusing on customers, managing labor, streamlining operations, and executing ongoing restructuring initiatives."

Total sales for fiscal 2001 were $37.9 billion, compared to $36.8 billion in fiscal 2000, an increase of 3.2 percent and $1.1 billion. For the year the company generated $2.1 billion in positive cash flow from operations, a 17 percent increase versus fiscal 2000. This facilitated a reduction in debt of $600 million. Net earnings for the year before restructuring and other items totaled $795 million, or $1.95 per diluted share, versus $870 million, or $2.08 per diluted share, a year earlier. Net earnings including restructuring and other items for the year were $501 million, or $1.23 per diluted share, versus $765 million, or $1.83 per diluted share in 2000, reflecting the major restructuring costs incurred in Fiscal 2001.

Comparable store sales for the quarter rose 0.2 percent, and identical store sales were down 0.5 percent in the quarter. For the year, comparable store sales were up 1.3 percent, and identical store sales rose 0.8 percent.

"During the quarter, we focused on improving our cash flow, executing our restructuring initiatives and strengthening our gross margins, rather than using deep discounting to generate what we believe would have been profitless growth in a difficult period," Johnston said. "We also reaped significant efficiencies from the aggressive cost and process control initiatives implemented in our stores and at distribution centers which served to further strengthen our gross margin."

The company said its major restructuring efforts announced last July have proceeded on track. To date 80 of the 165 targeted store closures have been completed with the balance expected to be closed or sold by the end of the second quarter of 2002.

Commenting on further restructuring, Johnston said, "The efforts to streamline and restructure the company for maximum efficiency must continue. This morning we are announcing our decision to exit several under-performing markets. Market exits will commence soon in Houston, San Antonio, Memphis and Nashville. This finalizes yet another chapter in the company's revitalization."

These market exits will occur through a combination of store closures and store sales. Division offices, located in Memphis, Houston and San Antonio will also be closing.
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