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AMERICAN STORES CO. ANNOUNCES SECOND QUARTER SALES AND EARNINGS

 SALT LAKE CITY, Aug. 24 /PRNewswire/ -- American Stores Co. (NYSE: ASC) today announced net earnings for its 1993 second quarter and year-to-date ended July 31, 1993. Second quarter earnings were $58.5 million, or $0.82 per common share, compared to $51.2 million, or $0.73 per common share, in 1992.
 The company's 1993 year-to-date net earnings were $100.0 million, or $1.41 per common share, compared to $69.5 million, or $0.99 per common share in 1992. Earnings before non-recurring items in 1993 were $1.35 per common share, compared to $1.19 per common share, in 1992. The 1993 year-to-date results include a non-recurring gain of $0.06 per common share reported in the first quarter, which resulted from the resolution of litigation offset by certain one-time charges. The 1992 26-week results included a non-recurring loss of approximately $0.20 per common share, principally on the sale of 74 Jewel Osco combination food and drug stores.
 Like-store sales, or sales from stores that have been open at least one year, decreased approximately 1 percent in the second quarter, reflecting the continuing soft economic environment and near-absence of food and drug inflation. Total sales were $9.361 billion for the six months and $4.693 billion for the second quarter.
 Operating profit in the second quarter increased 2.4 percent to $153.7 million in 1993, or 3.27 percent of sales, compared to $150.1 million, or 3.19 percent of sales in the 1992 second quarter. The operating profit figures for both the current and previous-year's second quarter include charges of approximately $20 million related to the company's purchase accounting amortization. Adjusted for the purchase accounting amortization, 1993's second quarter operating profit totaled $173.5 million, or 3.70 percent of sales.
 Victor L. Lund, president and chief executive officer of American Stores Co., said, "Our second quarter figures reflect the consolidated efforts of all American Stores Co. associates to achieve sales, cut costs and deliver results in a tough economic and competitive environment. We are particularly pleased by the progress made in our Southern California Lucky stores and the solid performance turned in by our drug store operations on top of last year's outstanding results."
 The Southern California Lucky stores launched an aggressive price reduction campaign in February 1993. The program helped to increase sales per customer and resulted in positive like-store sales for the 13-week second quarter. As expected, the campaign impacted operating profit comparisons to the prior year, though the gap was closed considerably in the second quarter and continues to be on target.
 Operating profit at the company's drug stores increased 1.5 percent over the prior year despite distinctly lower drug price inflation as well as costs associated with new and remodeled stores and converting and remerchandising recently acquired stores.
 "The drug stores did an outstanding job of controlling expense levels. Expense management is critical at this time in the business, when pharmacy margins are being squeezed by economic, health care policy and competitive factors," said Lund.
 The company continued to fulfill its capital spending commitment. Capital expenditures for the 26 weeks to date were $300.3 million, with 26 new stores opened and 61 remodels completed. Additionally, the company initiated operation of 55 former Reliable drug stores that were purchased during the quarter. Lund reiterated the company's commitment to continue its aggressive capital spending program.
 The recently signed Omnibus Budget Reconciliation Act of 1993 will increase the company's federal tax rate retroactively to Jan. 1, 1993, and impact net earnings beginning in the third quarter of 1993. Also, under SFAS No. 109, "Accounting for Income Taxes," a one-time tax expense related to deferred taxes will be recognized in the third quarter of 1993.
 American Stores Co. is one of the nation's largest food and drug retailers. It operates 1,714 stores in 27 states. Its principal retail operations include Lucky Stores, headquartered in San Leandro and Buena Park, Calif.; Jewel Food Stores, headquartered in Melrose Park, Ill.; Acme Markets, headquartered in Malvern, Pa.; Star Market, headquartered in Cambridge, Mass.; Jewel Osco, headquartered in Albuquerque, N.M.; Osco Drug, headquartered in Oak Brook, Ill.; and Sav-on drugs, headquartered in Anaheim, Calif.
 AMERICAN STORES CO.
 Consolidated Statements of Earnings
 (Amounts in thousands)
 (Unaudited)
 13 Weeks Ended 26 Weeks Ended
 July 31, Aug. 1, July 31, Aug. 1,
 1993 1992(a) 1993 1992(a)
 Sales $4,693,057 $4,702,547 $9,361,162 $9,626,621
 Cost of sales (3,457,871) (3,461,254) (6,913,191) (7,139,993)
 LIFO provision (11,000) (15,000) (22,000) (30,000)
 Gross profit 1,224,186 1,226,293 2,425,971 2,456,628
 Operating expenses (1,070,491) (1,076,185) (2,154,168) (2,186,183)
 Operating profit 153,695 150,108 271,803 270,445
 Interest expense (46,916) (53,260) (97,016) (111,954)
 Gains (losses) on
 asset sales, other (1,371) (1,997) 6,225 (29,803)
 Earnings before
 income taxes 105,408 94,851 181,012 128,688
 Federal and state
 income taxes (46,907) (43,620) (81,004) (59,189)
 Net earnings $58,501 $51,231 $100,008 $69,499
 Average common shares
 outstanding 71,033 69,978 70,986 69,637
 Net earnings per
 common share $0.82 $0.73 $1.41 $0.99
 Earnings per common
 share before non-
 recurring items $0.82 $0.73 $1.35 $1.19
 Dividends per common
 share $0.200 $0.175 $0.400 $0.350
 (a) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," as if effective at the beginning of fiscal 1989. The restatement increased previously reported 1992 second quarter earnings by $0.01 per common share and decreased year-to-date second quarter earnings by $.01 per common share.
 AMERICAN STORES CO.
 Sales and Operating Profit Detail
 (Amounts in thousands)
 (Unaudited)
 13 Weeks Ended 26 Weeks Ended
 July 31, Aug. 1, July 31, Aug. 1,
 1993 1992(a) 1993 1992(a)
 Like store sales:
 Eastern food operations -2.37 pct -1.82 pct
 Western food operations -1.53 pct -1.98 pct
 Drug store operations 1.50 pct 2.11 pct
 Total -1.24 pct -1.08 pct
 Sales:
 Eastern food
 operations $1,833,962 $1,866,248 $3,672,524 $3,728,879
 Western food
 operations 1,819,172 1,807,027 3,619,260 3,597,242
 Drug store
 operations 1,037,350 962,839 2,064,695 1,915,138
 Other 2,573 66,433 4,683 128,465
 Comparable 4,693,057 4,702,547 9,361,162 9,369,724
 Disposed of stores 0 0 0 256,897
 Total sales $4,693,057 $4,702,547 $9,361,162 $9,626,621
 Operating profit:
 Eastern food
 operations $67,601 $68,174 $120,317 $120,354
 Western food
 operations 59,057 64,330 108,112 133,734
 Drug store operations 53,390 52,625 96,388 93,965
 LIFO (11,000) (15,000) (22,000) (30,000)
 Purchase accounting
 amortization (19,839) (19,806) (39,683) (39,622)
 Other 4,486 (215) 8,669 6,469
 Comparable 153,695 150,108 271,803 284,900
 Disposed of stores 0 0 0 (14,455)
 Total operating
 profit $153,695 $150,108 $271,803 $270,445
 (a) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," as if effective at the beginning of fiscal 1989.
 NOTES: Eastern food operations include Acme Markets, Jewel Food Stores and Star Market.
 Western food operations include Lucky Northern California Division, Lucky Southern California Division and Jewel-Osco New Mexico.
 Drug store operations include Osco Drug and Sav-on.
 AMERICAN STORES CO.
 Operating Overviews
 (Amounts in thousands)
 (Unaudited)
 13 Weeks Ended 26 Weeks Ended
 July 31, Aug. 1, July 31, Aug. 1,
 1993 1992 1993 1992
 Eastern Food Operations
 Sales $1,833,962 $1,866,248 $3,672,524 $3,728,879
 Gross profit 460,302 465,668 911,692 913,297
 Percent sales 25.10 pct 24.95 pct 24.82 pct 24.49 pct
 Operating expenses 392,701 397,494 791,375 792,943
 Percent sales 21.41 pct 21.30 pct 21.55 pct 21.26 pct
 Operating profit $67,601 $68,174 $120,317 $120,354
 Percent sales 3.69 pct 3.65 pct 3.28 pct 3.23 pct
 13 Weeks Ended 26 Weeks Ended
 July 31, Aug. 1, July 31, Aug. 1,
 1993 1992 1993 1992
 Western Food Operations
 Sales $1,819,172 $1,807,027 $3,619,260 $3,597,242
 Gross profit 479,864 479,979 947,710 948,660
 Percent sales 26.38 pct 26.56 pct 26.19 pct 26.37 pct
 Operating expenses 420,807 415,649 839,598 814,926
 Percent sales 23.13 pct 23.00 pct 23.20 pct 22.65 pct
 Operating profit $59,057 $64,330 $108,112 $133,734
 Percent sales 3.25 pct 3.56 pct 2.99 pct 3.72 pct
 13 Weeks Ended 26 Weeks Ended
 July 31, Aug. 1, July 31, Aug. 1,
 1993 1992 1993 1992
 Drug Store Operations
 Sales $1,037,350 $962,839 $2,064,695 $1,915,138
 Gross profit 294,419 282,450 587,171 551,820
 Percent sales 28.38 pct 29.34 pct 28.44 pct 28.81 pct
 Operating expenses 241,029 229,825 490,783 457,855
 Percent sales 23.24 pct 23.87 pct 23.77 pct 23.91 pct
 Operating profit $53,390 $52,625 $96,388 $93,965
 Percent sales 5.15 pct 5.47 pct 4.67 pct 4.91 pct
 AMERICAN STORES CO.
 (Amounts in thousands, except store count)
 (Unaudited)
 Consolidated Condensed Balance Sheets
 July 31, Aug. 1, Jan. 30,
 1993 1992(a) 1993(a)
 Assets
 Inventory $1,431,862 $1,386,204 $1,576,499
 Other current assets 427,942 402,012 439,422
 Property, plant and
 equipment, net 2,544,973 2,342,068 2,441,573
 Property under capital
 leases, net 102,641 114,441 108,623
 Goodwill, net 1,854,078 1,907,565 1,880,821
 Other assets 303,942 325,100 316,855
 Total $6,665,438 $6,477,390 $6,763,793
 Liabilities and Shareholders'
 Equity
 Accounts payable $838,327 $839,291 $958,083
 Other current liabilities 953,872 921,545 956,623
 Long-term debt, less current
 maturities 2,084,632 2,147,890 2,086,464
 Obligations under capital
 leases, less current maturities 92,417 102,220 97,584
 Other liabilities 1,078,788 1,051,677 1,121,025
 Shareholders' equity 1,617,402 1,414,767 1,544,014
 Total $6,665,438 $6,477,390 $6,763,793
 Store Count
 Quarter Ended Quarter Stores Stores End of
 July 31, 1993 Beginning Opened Closed Quarter Remodels
 Eastern food
 operations(b) 491 5 (21) 475 6
 Western food
 operations 440 2 (1) 441 3
 Drug store
 operations(b) 745 63(c) (10) 798 21
 Total 1,676 70 (32) 1,714 30
 Year-to-Date Year Stores Stores 2nd Quarter
 July 31, 1993 Beginning Opened Closed Year-to-Date Remodels
 Eastern food
 operations(b) 490 7 (22) 475 14
 Western food
 operations 441 3 (3) 441 23
 Drug store
 operations(b) 741 71(c) (14) 798 24
 Total 1,672 81 (39) 1,714 61
 (a) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," as if effective at the beginning of fiscal 1989.
 (b) Includes 147 jointly operated Jewel Osco combination stores which are counted in both the Eastern food and drug store totals.
 (c) Includes the acquisition of 55 Reliable drug stores.
 AMERICAN STORES CO.
 Consolidated Condensed Cash Flows
 (Amounts in thousands)
 (Unaudited)
 26 Weeks Ended
 July 31, 1993 Aug. 1, 1992(a)
 Cash Flows From Operating
 Activities:
 Net earnings $100,008 $69,499
 Adjustments to reconcile net
 earnings to net cash provided
 by operating activities:
 Depreciation and amortization 188,348 187,088
 Net loss on asset sales 16,234 29,523
 Changes in operating assets
 and liabilities(b) (101,154) (84,244)
 Net cash provided by operating
 activities 203,436 201,866
 Cash Flows From Investing
 Activities:
 Proceeds from the sale of assets 12,721 458,447
 Capital expenditures(c) (259,113) (122,770)
 Net cash provided by (used in)
 investing activities (246,392) 335,677
 Cash Flows From Financing
 Activities:
 Proceeds from long-term borrowing 100,000 399,071
 Net reduction in borrowing under
 existing facilities (8,065) (896,943)
 Cash dividends (28,413) (24,475)
 Other changes in equity 1,793 3,313
 Net cash provided by (used in)
 financing activities 65,315 (519,034)
 Net increase in cash and
 cash equivalents 22,359 18,509
 Cash and cash equivalents at
 beginning of period 54,048 71,292
 Cash and cash equivalents at
 end of period $76,407 $89,801
 (a) Restated to reflect adoption of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," as if effective at the beginning of fiscal 1989.
 (b) Amounts reflected for 1992 are net of effects of the sale of 74 Jewel Osco combination stores.
 (c) Total capital expenditures, including the present value of new leases, were $175,844 for the quarter and $300,272 for the year-to-date ended July 31, 1993, and $80,519 for the quarter and $181,009 for the year-to-date ended Aug. 1, 1992.
 -0- 8/24/93
 /CONTACT: Meredith C. Anderson, VP-public, government and investor relations of American Stores, 801-539-0112/
 (ASC)


CO: American Stores Co. ST: Utah IN: REA SU: ERN

MF-JL -- LA005 -- 5259 08/24/93 06:02 EDT
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