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AMERICAN STORES CO. ANNOUNCES FIRST QUARTER SALES AND EARNINGS

 SALT LAKE CITY, May 25 /PRNewswire/ -- American Stores Co. (NYSE: ASC) today announced that net earnings for its 1993 first quarter, ended May 1, 1993, were $41.5 million, or $0.59 per common share, compared to $18.3 million, or $0.26 per common share, in the 1992 first quarter. Earnings before non-recurring items for the 1993 first quarter were $0.53 per common share, an increase of 15.2 percent over 1992's first quarter results of $0.46 per common share.
 The company's 1993 results include a non-recurring gain of $0.06 per common share from the resolution of the "Rule of 80" litigation, net of certain one-time charges principally associated with debt restructuring. The "Rule of 80" litigation was initiated in 1986 to resolve uncertainties that arose when the company terminated the early retirement feature of an employee retirement plan. The 1992 first quarter results include a non-recurring loss of $0.20 per common share 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 slightly during the quarter. Total sales were $4.7 billion in the 1993 first quarter, which were approximately equal to sales from ongoing operations in the comparable 1992 quarter. Total sales of $4.9 billion in the 1992 first quarter included the 74 Jewel Osco combination food and drug stores that were sold in April 1992.
 Operating profit for the first quarter of 1993 was $118.1 million vs. $120.3 million in the prior year. The decrease is primarily attributable to lower earnings in the company's western food operations, reflecting the impact of the implementation of a price reduction program in February 1993. The program is a direct initiative to improve sales in California's difficult economic environment.
 The company benefited in the first quarter from lower interest expense because of decreased debt levels compared to the prior year. Interest expense was $50.1 million in 1993, compared to $58.7 million in 1992.
 The company also adopted SFAS No. 109, "Accounting for Income Taxes," in the first quarter of 1993. It is anticipated that the adoption of SFAS No. 109, and the restatement of the carrying values of net assets, will not have a material impact on future net earnings of the company.
 Victor L. Lund, president and chief executive officer, said, "Our first quarter results provide a solid beginning for our 1993 fiscal year. Earnings are on track and generally exceeded analysts' expectations."
 Commenting on the company's western food operations results, Lund said, "We are extremely pleased with the progress of our price reduction program in our California and Nevada Lucky stores. As expected, this important program impacted first quarter profits; however, the program is having a favorable effect on sales. Like store sales in our Southern California stores were at their best level in nine quarters. We are on target for sales and profits, and we expect the program to continue to build sales throughout the year with a decreasing impact on profits."
 Lund noted the favorable performance of the company's eastern food and drug store operations. "Our eastern food operations' results are particularly gratifying. Severe weather conditions in the eastern half of the nation challenged us during the first quarter. The results are truly a testament to the dedication and hard work of our associates. Our drug stores also achieved steady results despite relatively low drug price inflation."
 Concerning the company's capital spending program, in the first quarter of 1993 capital expenditures totaled $124.4 million with 11 new stores opened and 31 remodels completed. Lund reiterated the company's commitment to its 1993 capital spending program of $650 million.
 American Stores Co. is one of the nation's largest food and drug retailers. It operates 1,676 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, headquartered in Anaheim, Calif.
 AMERICAN STORES CO.
 Consolidated Statements of Earnings
 (Amounts in thousands)
 (Unaudited)
 13 Weeks Ended
 May 1, May 2,
 1993 1992(a)
 Sales $4,668,105 $4,924,074
 Cost of sales (3,455,320) (3,678,739)
 LIFO provision (11,000) (15,000)
 Gross profit 1,201,785 1,230,335
 Operating
 expenses (1,083,677) (1,109,998)
 Operating
 profit 118,108 120,337
 Interest expense (50,100) (58,694)
 Gains (losses)
 on asset sales,
 other 7,596 (27,806)
 Earnings before
 income taxes 75,604 33,837
 Federal and state
 income taxes (34,097) (15,569)
 Net earnings $41,507 $18,268
 Average common
 shares
 outstanding 70,940 69,297
 Net earnings per
 common share $0.59 $0.26
 Earnings per
 common share
 before non-
 recurring items $0.53 $0.46
 Dividends per
 common share $0.200 $0.175
 (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 reduced previously reported 1992 first quarter earnings by $0.02 per common share.
 AMERICAN STORES CO.
 Sales and Operating Profit Detail
 (Amounts in thousands)
 (Unaudited)
 13 Weeks Ended
 May 1, May 2,
 1993 1992(a)
 Like store sales:
 Eastern food operations -1.29 pct.
 Western food operations -2.44 pct.
 Drug store operations 2.53 pct.
 Total -0.96 pct.
 Sales:
 Eastern food operations $1,838,562 $1,862,631
 Western food operations 1,800,088 1,790,215
 Drug store operations 1,027,345 952,299
 Other 2,110 62,032
 Comparable 4,668,105 4,667,177
 Disposed of stores 0 256,897
 Total sales $4,668,105 $4,924,074
 Operating profit:
 Eastern food operations $52,716 $52,180
 Western food operations 49,055 69,404
 Drug store operations 42,998 41,340
 LIFO (11,000) (15,000)
 Purchase accounting
 amortization (19,844) (19,816)
 Other 4,183 6,684
 Comparable 118,108 134,792
 Disposed of stores 0 (14,455)
 Total operating profit $118,108 $120,337
 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.
 "Other" includes real estate operations.
 (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.
 AMERICAN STORES CO.
 Operating Overviews
 (Amounts in thousands)
 (Unaudited)
 13 Weeks Ended
 May 1, May 2,
 1993 1992
 Eastern food operations
 Sales $1,838,562 $1,862,631
 Gross profit 451,390 447,629
 Percent sales 24.55 pct 24.03 pct
 Operating expenses 398,674 395,449
 Percent sales 21.68 pct 21.23 pct
 Operating profit $52,716 $52,180
 Percent sales 2.87 pct 2.80 pct
 13 Weeks Ended
 May 1, May 2,
 1993 1992
 Western food operations
 Sales $1,800,088 $1,790,215
 Gross profit 467,846 468,681
 Percent sales 25.99 pct 26.18 pct
 Operating expenses 418,791 399,277
 Percent sales 23.27 pct 22.30 pct
 Operating profit $49,055 $69,404
 Percent sales 2.73 pct 3.88 pct
 13 Weeks Ended
 May 1, May 2,
 1993 1992
 Drug store operations
 Sales $1,027,345 $952,299
 Gross profit 292,752 269,370
 Percent sales 28.50 pct 28.29 pct
 Operating expenses 249,754 228,030
 Percent sales 24.31 pct 23.95 pct
 Operating profit $42,998 $41,340
 Percent sales 4.19 pct 4.34 pct
 AMERICAN STORES CO.
 (Amounts in thousands, except store count)
 (Unaudited)
 Consolidated Condensed Balance Sheets
 May 1, May 2, Jan. 30,
 1993 1992(a) 1993(a)
 Assets
 Inventory $1,488,464 $1,470,772 $1,576,499
 Other current assets 406,119 452,051 439,422
 Property, plant and
 equipment, net 2,477,812 2,362,984 2,441,573
 Property under capital
 leases, net 105,496 117,856 108,623
 Goodwill, net 1,867,450 1,920,936 1,880,821
 Other assets 309,970 308,603 316,855
 Total $6,655,311 $6,633,202 $6,763,793
 Liabilities and
 Shareholders' Equity
 Accounts payable $879,195 $851,236 $958,083
 Other current
 liabilities 829,211 1,024,635 956,623
 Long-term debt, less
 current maturities 2,137,370 2,142,575 2,086,464
 Obligations under
 capital leases, less
 current maturities 94,812 104,836 97,584
 Other liabilities 1,142,724 1,135,638 1,121,025
 Shareholders' equity 1,571,999 1,374,282 1,544,014
 Total $6,655,311 $6,633,202 $6,763,793
 Store Count
 Stores Stores End of
 Beginning Opened Closed Quarter Remodels
 Quarter Ended May 1, 1993
 Eastern food operations(b) 490 2 (1) 491 8
 Western food operations 441 1 (2) 440 20
 Drug store operations(b) 741 8 (4) 745 3
 Total 1,672 11 (7) 1,676 31
 (b) Includes 145 jointly operated Jewel Osco combination stores which are counted in both the Eastern food and Drug store totals.
 Miscellaneous Information
 Quarter Ended
 May 1, May 2,
 1993 1992
 Depreciation and amortization $94,016 $92,493(a)
 Capital expenditures $124,428 $100,490
 (a) Restated to reflect adoption of Statemnt of Financial Accounting Standards No. 109, "Accounting for Income Taxes," as if effective at the beginning of fiscal 1989.
 -0- 5/25/93
 /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

JB-JL -- LA007 -- 1936 05/25/93 06:01 EDT
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