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AMERICAN STORES CO. ANNOUNCES THIRD QUARTER SALES AND EARNINGS

 SALT LAKE CITY, Nov. 23 /PRNewswire/ -- American Stores Co. (NYSE: ASC) today announced net earnings for its 1993 third quarter and year-to-date, ended Oct. 30, 1993. Third quarter net earnings were $45.4 million, or $0.64 per share. The 1993 third quarter results include the impact of the recent federal tax rate change on the company, totaling $0.09 per share. Excluding this non-recurring charge, third quarter earnings were $51.9 million, or $0.73 per share, compared to $43.2 million, or $0.62 per share, in 1992.
 The company's 1993 year-to-date net earnings were $145.4 million, or $2.05 per share. The 1993 results include a non-recurring gain of $0.06 per share reported in the first quarter resulting from the resolution of litigation and certain one-time charges, offset by the impact of the tax rate change, totaling $0.09 per share in the third quarter. The 1992 year-to-date net earnings of $112.7 million, or $1.61 per share, included a non-recurring loss of approximately $0.20 per share, principally on the sale of 74 southwestern Jewel Osco combination food and drug stores. Before these non-recurring items, the 1993 year-to-date net earnings were $2.08 per share, compared to $1.81 per share in 1992.
 Like-store sales, or sales from stores that have been open at least one year, decreased 1.7 percent in the third quarter and 1.2 percent for the year-to-date, reflecting the continuing soft economic environment and the near-absence of food and drug inflation. Total sales were $4.532 billion for the third quarter and $13.893 billion for the year- to-date.
 Operating profit increased 3.3 percent to $137.0 million (3.02 percent of sales), compared to $132.6 million (2.90 percent of sales) in the prior-year's third quarter. The operating profit figures for both the current and previous year's third quarter include charges of approximately $20 million, or approximately $0.25 per share, related to the company's purchase accounting amortization. Adjusted for this, 1993's third quarter operating profit totaled $156.8 million (3.46 percent of sales).
 Concurrent with its earnings report, the company announced new preferential labor agreements for warehouse-format food operations in California. The company is currently studying the potential for new store formats and their competitive wage structure in its California operations resulting from these labor agreements, though no plans have been announced at this time.
 Victor L. Lund, president and chief executive officer, of American Stores Co., said, "The third quarter results demonstrate our team's ability to produce higher earnings in the face of tough economic times and minimal food and drug inflation. We accomplished this primarily through outstanding expense control, principally in our food operations." The company's total operating expenses declined from $1.071 billion (23.41 percent of sales) in 1992's third quarter to $1.058 billion (23.36 percent of sales) in the present year's third quarter.
 "Our strongest performance came from our Lucky operations in Southern California. We are convinced, now more than ever, that our decision earlier this year to invest in lower prices in Southern California was absolutely the right decision at the right time. Our third quarter earnings show the benefit from this investment. Equally important, the consumers of Southern California are the true beneficiaries, with lower everyday prices and solid value, especially in these tough economic times."
 The Southern California Lucky operations launched an aggressive price reduction campaign in February 1993. As expected, the campaign negatively impacted operating profit comparisons to the prior year in the first and second quarters. However, the operating profit comparison became favorable in the third quarter.
 "Drug store sales were up 10 percent over the prior year, due primarily to the acquisition of several Thrifty, Rx Plus, and Reliable drug stores in 1992 and 1993," said Lund. "Operating profit was lower in the third quarter, however, resulting from the integration costs of these acquisitions, generally lower gross margins, and a tough comparison against exceptionally high drug store operating profit in 1992, which was up 37 percent over 1991."
 The Omnibus Budget Reconciliation Act of 1993 increased the company's effective tax rate by 1 percent in the quarter. The higher tax rate was retroactive to Jan. 1, 1993, and resulted in a $0.03 per share charge this quarter attributable to the first two quarters of 1993. In addition, the increased tax rate also resulted in a one-time deferred tax adjustment of $0.06 per share, this quarter.
 American Stores Co.'s capital expenditure commitment continued during the third quarter. Total capital expenditures for the 39 weeks to date were $498.8 million, with 29 new stores opened and 98 remodels completed. Additionally, the company initiated operation of 55 former Reliable and four former Thrifty drug stores during the year. For the quarter, three new stores were opened, four stores were acquired, 37 stores were remodeled, and nine stores were closed.
 American Stores Co. is one of the nation's largest food and drug retailers. It operates 1,712 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 39 Weeks Ended
 Oct. 30, Oct. 31, Oct. 30, Oct. 31,
 1993 1992(a) 1993 1992(a)
 Sales $4,531,715 $4,574,284 $13,892,877 $14,200,905
 Cost of sales (3,328,317) (3,360,709) (10,241,508) (10,500,702)
 LIFO provision (8,000) (10,000) (30,000) (40,000)
 Gross profit 1,195,398 1,203,575 3,621,369 3,660,203
 26.38 pct 26.31 pct 26.07 pct 25.77 pct
 Operating expenses (1,058,404) (1,070,982) (3,212,572) (3,257,165)
 -23.36 pct -23.41 pct -23.12 pct -22.94 pct
 Operating profit 136,994 132,593 408,797 403,038
 3.02 pct 2.90 pct 2.94 pct 2.84 pct
 Interest expense (46,830) (51,681) (143,846) (163,635)
 Gains (losses) on
 asset sales, other 1,844 (856) 8,069 (30,659)
 Earnings before
 income taxes 92,008 80,056 273,020 208,744
 Federal and state
 income taxes (46,600) (36,834) (127,604) (96,023)
 Net earnings $45,408 $43,222 $145,416 $112,721
 Average common shares
 outstanding 71,191 70,575 71,054 69,950
 Net earnings
 per share $0.64 $0.62 $2.05 $1.61
 Earnings per
 share before non-
 recurring items $0.73 $0.62 $2.08 $1.81
 Dividends per share $0.200 $0.175 $0.600 $0.525
 (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 third quarter earnings by $0.01 per share and had no per share impact on year-to-date third quarter earnings.
 AMERICAN STORES CO.
 Sales and Operating Profit Detail
 (Amounts in thousands)
 (Unaudited)
 13 Weeks Ended
 Oct. 30, Oct. 31,
 1993 1992(a)
 Like store sales:
 Eastern food operations -2.73 pct
 Western food operations -2.58 pct
 Drug store operations 1.78 pct
 Total -1.71 pct
 Sales:
 Eastern food operations $1,726,059 $1,788,036 -3.47 pct
 Western food operations 1,762,547 1,772,584 -0.57 pct
 Drug store operations 1,038,916 944,628 9.98 pct
 Other 4,193 69,036
 Comparable 4,531,715 4,574,284 -0.93 pct
 Disposed of stores 0 0
 Total sales $4,531,715 $4,574,284 -0.93 pct
 Operating profit:
 Eastern food operations $58,724 $61,651 -4.75 pct
 Western food operations 69,820 60,558 15.29 pct
 Drug store operations 32,606 43,320 -24.73 pct
 LIFO (8,000) (10,000)
 Purchase accounting
 amortization (19,776) (20,204)
 Other 3,620 (2,732)
 Comparable 136,994 132,593 3.32 pct
 Disposed of stores 0 0
 Total operating profit $136,994 $132,593 3.32 pct
 39 Weeks Ended
 Oct. 30, Oct. 31,
 1993 1992(a)
 Like store sales:
 Eastern food operations -2.00 pct
 Western food operations -2.19 pct
 Drug store operations 2.00 pct
 Total -1.22 pct
 Sales:
 Eastern food operations $5,398,583 $5,516,915 -2.14 pct
 Western food operations 5,381,807 5,369,826 0.22 pct
 Drug store operations 3,103,611 2,859,766 8.53 pct
 Other 8,876 197,501
 Comparable 13,892,877 13,944,008 -0.37 pct
 Disposed of stores 0 256,897
 Total sales $13,892,877 $14,200,905 -2.17 pct
 Operating profit:
 Eastern food operations $179,041 $182,005 -1.63 pct
 Western food operations 177,932 194,292 -8.42 pct
 Drug store operations 128,994 137,285 -6.04 pct
 LIFO (30,000) (40,000)
 Purchase accounting
 amortization (59,459) (59,826)
 Other 12,289 3,737
 Comparable 408,797 417,493 -2.08 pct
 Disposed of stores 0 (14,455)
 Total operating profit $408,797 $403,038 1.43 pct
 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.
 (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 39 Weeks Ended
 Oct. 30, Oct. 31, Oct. 30, Oct. 31,
 1993 1992 1993 1992
 Eastern Food
 Operations
 Sales $1,726,059 $1,788,036 $5,398,583 $5,516,915
 Gross profit 443,069 461,236 1,354,761 1,374,533
 Percent sales 25.67 pct 25.80 pct 25.09 pct 24.91 pct
 Operating expenses 384,345 399,585 1,175,720 1,192,528
 Percent sales 22.27 pct 22.35 pct 21.78 pct 21.62 pct
 Operating profit $58,724 $61,651 $179,041 $182,005
 Percent sales 3.40 pct 3.45 pct 3.32 pct 3.30 pct
 13 Weeks Ended 39 Weeks Ended
 Oct. 30, Oct. 31, Oct. 30, Oct. 31,
 1993 1992 1993 1992
 Western Food
 Operations
 Sales $1,762,547 $1,772,584 $5,381,807 $5,369,826
 Gross profit 468,180 468,413 1,415,890 1,417,073
 Percent sales 26.56 pct 26.43 pct 26.31 pct 26.39 pct
 Operating expenses 398,360 407,855 1,237,958 1,222,781
 Percent sales 22.60 pct 23.01 pct 23.00 pct 22.77 pct
 Operating profit $69,820 $60,558 $177,932 $194,292
 Percent sales 3.96 pct 3.42 pct 3.31 pct 3.62 pct
 13 Weeks Ended 39 Weeks Ended
 Oct. 30, Oct. 31, Oct. 30, Oct. 31,
 1993 1992 1993 1992
 Drug Store
 Operations
 Sales $1,038,916 $944,628 $3,103,611 $2,859,766
 Gross profit 290,689 273,139 877,860 824,959
 Percent sales 27.98 pct 28.91 pct 28.29 pct 28.85 pct
 Operating expenses 258,083 229,819 748,866 687,674
 Percent sales 24.84 pct 24.33 pct 24.13 pct 24.05 pct
 Operating profit $32,606 $43,320 $128,994 $137,285
 Percent sales 3.14 pct 4.59 pct 4.16 pct 4.80 pct
 AMERICAN STORES CO.
 (Amounts in thousands, except store count)
 (Unaudited)
 Consolidated Condensed Balance Sheets
 Oct. 30, Oct. 31, Jan. 30,
 1993 1992(d) 1993(d)
 Assets
 Inventory $1,613,747 $1,586,455 $1,576,499
 Other current assets 414,049 403,169 439,422
 Property, plant and
 equipment, net 2,643,380 2,367,157 2,441,573
 Property under capital
 leases, net 99,872 111,529 108,623
 Goodwill, net 1,840,706 1,894,193 1,880,821
 Other assets 301,897 320,960 316,855
 Total $6,913,651 $6,683,463 $6,763,793
 Liabilities and Shareholders'
 Equity
 Accounts payable $980,085 $996,153 $958,083
 Other current liabilities 966,241 905,433 956,623
 Long-term debt, less current
 maturities 2,141,938 2,135,127 2,086,464
 Obligations under capital
 leases, less current maturities 90,138 99,890 97,584
 Other liabilities 1,083,745 1,100,215 1,121,025
 Shareholders' equity 1,651,504 1,446,645 1,544,014
 Total $6,913,651 $6,683,463 $6,763,793
 Store Count
 Quarter Ended Quarter Stores Stores End of
 Oct. 30, 1993 Beginning Opened Closed Quarter Remodels
 Eastern food
 operations(a) 475 0 0 475 9
 Western food
 operations 441 1 (4) 438 6
 Drug store
 operations(a) 798 6(b) (5) 799 22
 Total 1,714 7 (9) 1,712 37
 Year-to-Date Year Stores Stores 3rd Quarter
 Oct. 30, 1993 Beginning Opened Closed Year-to-Date Remodels
 Eastern food
 operations(a) 490 7 (22) 475 23
 Western food
 operations 441 4 (7) 438 29
 Drug store
 operations(a) 741 77(c) (19) 799 46
 Total 1,672 88 (48) 1,712 98
 (a) Includes 147 jointly operated Jewel Osco combination stores which are counted in both the eastern food and drug store totals.
 (b) Includes the acquisition of four Thrifty drug stores.
 (c) Includes the acquisition of 55 Reliable drug stores and four Thrifty drug stores.
 (d) 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.
 Consolidated Condensed Cash Flows
 (Amounts in thousands)
 (Unaudited)
 39 Weeks Ended
 Oct. 30, 1993 Oct. 31, 1992(a)
 Cash Flows From Operating
 Activities:
 Net earnings $145,416 $112,721
 Adjustments to reconcile net
 earnings to net cash provided
 by operating activities:
 Depreciation and amortization 285,691 270,865
 Net loss on asset sales 13,907 31,035
 Changes in operating assets
 and liabilities(b) (110,271) (113,839)
 Net cash provided by operating
 activities 334,743 300,782
 Cash Flows From Investing Activities:
 Proceeds from the sale of assets 26,120 461,809
 Capital expenditures(c) (444,636) (223,538)
 Net cash (used in) provided by
 investing activities (418,516) 238,271
 Cash Flows From Financing Activities:
 Proceeds from long-term borrowing 100,000 400,809
 Net increase (reduction) in borrowing
 under existing facilities(b) 17,089 (910,569)
 Cash dividends (42,655) (36,827)
 Other changes in equity 4,729 4,321
 Net cash provided by (used in)
 financing activities 79,163 (542,266)
 Net decrease in cash and
 cash equivalents (4,610) (3,213)
 Cash and cash equivalents at
 beginning of period 54,048 71,292
 Cash and cash equivalents at
 end of period $49,438 $68,079
 (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 $198.5 million for the quarter and $498.8 million for the year-to-date ended Oct. 30, 1993, and $105.1 million for the quarter and $286.1 million for the year-to-date ended Oct. 31, 1992.
 -0- 11/23/93 R
 /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

AF -- LA011R -- 7227 11/23/93 11:30 EST
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