SALT LAKE CITY - American Stores Co. here reported increased sales and earnings for the fourth quarter ended Jan. 29.
The company also posted decreased sales and increased earnings for the year.
Net income rose 19% for the year and 7.3% for the quarter, while sales fell 1.5% for the year to $18.8 billion and rose 0.4% for the quarter to $4.9 billion. Same-store sales fell 0.4% for the year and 1% for the quarter.
Fourth-quarter earnings were impacted by nonrecurring items totaling $11.1 million or 9 cents per share; $3.6 million in costs associated with the Jan. 17 earthquake in southern California; $3.5 million stemming from a buyout and severance package in American's Eastern food division, primarily at Acme Markets, and $700,000 from a smaller severance package in the drug-store division.
American's Eastern food operations - Acme Markets, Malvern, Pa.; Jewel Food Stores, Melrose Park, Ill., and Star Market Co., Cambridge, Mass. - experienced sales declines of 1.9% for the year and 1.2% for the quarter, while its Western food operations - Lucky Stores in northern and southern California and Jewel Osco in New Mexico - recorded sales increases of 0.7% for the year and 2.1% for the quarter.
On a same-store basis, Eastern food sales fell 1.8% for the year and 1.2% for the quarter, while Western food sales fell 1.9% for the year and 0.9% for the quarter.,
Victor L. Lund, president and chief executive officer, said each of the company's three operating segments, including drug stores, achieved higher profits in the fourth quarter compared with the prior year.
"The fourth-quarter like-store sales in our southern California Lucky operations were the highest we have recorded since the second quarter of 1990, reflecting the benefit of the price program we initiated at the beginning of the year," Lund declared. Ed Comeau, a securities analyst with Lehman Bros., New York, said Lucky's comps in southern California were up 2%.
Looking at American's overall results, Comeau said it was "a good, solid performance. The company still has negative same-store sales in its grocery divisions, but it showed moderate improvement throughout, particularly in Lucky's southern California operations and in the Jewel division."