US supermarket group Albertsons has reported higher Q3 net earnings as its sales in Southern California finally returned to pre-strike levels.

The retailer reported net earnings of US$110m, or 29 cents per share, for the third quarter to 28 October, compared to $92m, or 25 cents per share, in the year-ago quarter. Sales rose to $10.0bn from $8.7bn a year earlier.

The increase in sales was due primarily to increased sales volumes resulting from the acquisitions of Shaw's and Bristol Farms, as well as an increase in Southern California division sales following the labour dispute experienced in the prior year. To a lesser extent, sales were also boosted in the Florida division leading up to and following the hurricanes. Total company comparable store sales for the quarter edged up 0.3% and identical store sales increased 0.1%.

The company said its sales performance in Southern California continued to improve as a result of targeted investments made since the end of the labour dispute earlier this year, with sales and market share levels at the end of the quarter above the pre-strike levels achieved in the third quarter of 2002.

"We had encouraging performance during another tough quarter for food and drug retailers as consumer confidence declined in each month of the quarter and fuel prices continued to put pressure on discretionary income. Despite these tough conditions, we continued to focus on driving costs out of the business, differentiating our asset portfolio, re-investing heavily in pricing and promotions to give customers a better value offering and growing market share," said Larry Johnston, chairman, CEO and president.

Albertsons said that given the current economic and competitive environment, as well as the continuing need to reinvest margin to grow sales and market share, the company now believes that full-year earnings will be in the lower end of its $1.40 to $1.50 per share guidance range.