Albertsons, the nation's second-biggest supermarket chain, said Tuesday that its third-quarter earnings fell 30 percent, hurt by the Gulf...
BOISE, Idaho — Albertsons, the nation’s second-biggest supermarket chain, said Tuesday that its third-quarter earnings fell 30 percent, hurt by the Gulf Coast hurricanes, pressure from rivals and flat sales.
The earnings missed analysts’ expectations for a second quarter in a row, and Albertsons reduced its full-year profit outlook, adding to pressure on the Boise-based grocer to find a buyer to help it turn around a slumping business hurt by competition from Wal-Mart Stores.
Chief Executive Officer Larry Johnston, on a Tuesday morning conference call, told investors he’s still exploring “strategic options” after putting the company up for sale in September.
Albertsons’ results may “challenge bid prices,” Bear Stearns analyst Robert Summers wrote in a report Tuesday. “In our view, continued uninspiring operational performance creates the prospect of reduced bid prices.”
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Albertsons — which operates about 2,500 stores in 37 states — reported that profit declined to $77 million, or 21 cents a share, for the three months ended Nov. 3, from $110 million, or 30 cents a share, in the year-ago period.
Earnings from continuing operations totaled $81 million, or 22 cents a share, compared with $107 million, or $1.08 per share in 2004. Excluding the impact of the three hurricanes that hit Louisiana, Texas and Florida during the quarter, earnings from continuing operations totaled $91 million, or 24 cents per share.
Wall Street analysts had expected the company to earn 27 cents per share on sales of $10 billion, according to Thomson Financial.
Total sales slipped to $9.95 billion versus $9.97 billion a year ago.
Total same-store sales, or sales at locations open at least one year, declined 0.4 percent.
“It was a challenging quarter,” Johnston told investors, adding that the company lost ground to rivals in regions where Albertsons isn’t the largest supermarket. “Competitive pressure was intense in many of our markets.”
Albertsons narrowed its profit guidance for fiscal 2005 to between $1.37 and $1.40 per share, excluding items, from a prior view of $1.37 to $1.47.
The weak results pushed the company’s stock down 6 cents to $24.60.
Comments from analyst Robert Summers were reported by Bloomberg News.