BOISE, Idaho -- Albertson's here said last week cost savings from its merger with American Stores Co. exceeded expectations by $35 million during the fourth quarter ended Feb. 3.
nticipated. He said the additional savings will be reinvested to increase sales "and build a stronger base for the future."
The company said merger-related costs were in line with its original estimates, amounting to $551 million after taxes, or $1.30 per share, for the year, and $46 million net, or 11 cents per share, for the quarter.
Including those costs, net income fell 49.5% to $404.1 million for the year and rose 39.3% to $264 million for the quarter. Excluding merger-related costs for both the last two years and fourth quarters, the company said net income rose 0.6% for the year to $954.7 and fell 2.9% to $309.5 million for the quarter.
The company said it expects to incur additional after-tax merger-related costs of approximately $157 million over the next two years.
As previously reported, sales rose 4.5% to $37.5 billion for the 53-week year over last year's 52-week year, or 5.4% when compared on a 52-week basis; for the 14-week quarter sales were up 5.3% to $9.9 billion over last year's 13-week quarter, or 4.5% on a 13-week basis.
The company said comparable-store sales, excluding sales from divested stores, rose 2.8% for the quarter; the company did not report comps for the year.
Gary Michael, chairman and chief executive officer, said the fourth quarter lived up to the company's expectations. "We placed our emphasis on sales and we exceeded our goals. We also placed a lot of emphasis on restoring our tracking and projection systems, especially in California [where it converted 172 former Lucky Stores to the Albertson's banner], and we've made significant progress."