USA: Albertsons raises 2004 guidance, sees Shaw’s completion in Q2
US grocery retailer Albertson's has raised its earnings guidance for 2004 after receiving US antitrust clearance for its acquisition of Shaw's from UK retail group J Sainsbury.
Albertsons said that it expects the acquisition of Shaw's to be ten cents per share accretive to earnings in 2004, and as a result the company raised its guidance for annual earnings from continuing operations to between $1.40 and $1.50 per share, from a previous forecast of $1.30 to $1.40 per share.
The company said it expects the Shaw's acquisition, which remains subject to closing conditions, to be completed in the second quarter.
Although Albertsons does not normally provide quarterly earnings guidance, the company said it expects earnings from continuing operations to range from ten cents to twelve cents per share for the first quarter of 2004.
The company said it was providing the quarterly guidance "to better enable investors to properly understand the impact and complexity of the recovery in Southern California following the labour dispute there, as well as miscellaneous restructuring activities previously announced in its Dallas/Ft. Worth division".
First-quarter earnings are expected to be impacted by 14 cents per share for the costs of the Southern California labour dispute and payments stemming from the ratification of collective bargaining agreements.
As part of a bid to win back customers in Southern California once the strike had ended, the company invested heavily in those operations. The impact of these investments in the first quarter is expected to be 18 cents per share.
Going forward, the company expects to continue making significant investments in the Southern California recovery. Investment levels are expected to remain high in the second quarter, with declining investments in the third and fourth quarters.
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