US supermarket operator Albertsons has reported lower quarterly net earnings, hit by a massive labour dispute in Southern California.
The company posted net earnings of US$130m, or 35 cents per share, for the fourth quarter to 29 January, compared to $205m, or 54 cents per share, for the year-ago period. Albertsons estimated that the recently-resolved labour dispute in Southern California reduced fourth-quarter earnings by around $90m, or 24 cents per share.
Total sales were $8.6bn for the quarter compared to $9.1bn in last year’s fourth quarter. Albertsons said it estimated that the labour dispute negatively impacted total sales by approximately $700m in the fourth quarter.
Total company comparable store sales for the quarter (including the impact of the labour dispute) declined 6.5% and identical store sales declined 6.8%. Excluding the Southern California stores involved in the labour dispute, total company comparable store sales for the quarter increased 1.2% and identical store sales increased 0.9%.
For the full year the company posted net earnings of $556m, or $1.51 per share, versus $485m, or $1.22 per share, in the prior year. Fiscal 2003 total sales were $35.4bn versus $35.6bn in the prior year.
“2003 was a challenging year that was affected by a recovering US economy, a more competitive marketplace for food and drug retailers as well as a labour dispute of historic proportions,” said CEO Larry Johnston.
“Despite these obstacles, our team outperformed their operating plan and exceeded the First Call Consensus of Industry Analysts for both the fourth quarter and the year, which included analyst estimates of the impact of the labour dispute. This clearly shows that our new marketing plans, supply chain initiatives and cost control programmes are continuing to gain traction as we transform the company,” Johnston added.
In 2003, the company opened a total of 79 new stores and completed 192 remodels. Six of these openings and 29 remodels were completed in the fourth quarter.
Now that the labour dispute is resolved, the company said it had decided to reinstate annual earnings guidance. Albertsons said it expects earnings for fiscal 2004 to be in a range of $1.30 to $1.40 per share. This forecast includes the known costs of the labour dispute during the first quarter as well as expected costs of recovery in Southern California and investments in Southern California promotions.