ALBERTSONS SEES TRENDS IMPROVING

BOISE, Idaho -- Albertsons here last week said it was beginning to see some positive sales trends in the third quarter, which it attributed at least in part to the success of its more aggressive pricing and promotional programs.

s and product categories.

"It tells us that our promotions are working," he said. "We hope that continues, and we believe it will."

Comparable-store sales were positive during the first four weeks of the third quarter, he said.

He said the company would be able to meet its net earnings targets for the year of $1.70 to $1.75 per share through cost reductions, even if the sales gains do not continue. Cost reductions are coming in part through strategic sourcing and supply chain initiatives.

In addition, the company said its margins are benefiting from the increased penetration of private-label products, which was up 80 basis points in the second quarter after the launch of 250 new items. Margins were negatively impacted by increasing costs for workers' compensation insurance and benefits for union employees.

During the second quarter, net income totaled $162 million, down 37% from year-ago levels. Sales grew 1.25%, to $9.05 billion. Comparable-store sales declined 0.9% for the quarter, and identical-store sales slid 1.3%, which included a benefit of 0.4% from fuel sales.

Through the first half, net income was $334 million, vs. $92 million in the year-ago period, which included several one-time charges. Sales in the first half totaled $17.99 billion, up 0.7% over results from the first half of the prior year.