Albertson’s Issues Earnings Warning

Albertson’s Inc., the second-biggest U.S. grocer, said profit in its fiscal second quarter and this year will be less than expected because of slowing same-store sales and higher operating costs. Albertson’s expects to earn about 50 cents a share before merger expenses in the quarter ended Aug. 3. Annual profit will be at or slightly higher than the $2.26 a share it earned last year. The average estimates of analysts polled by First Call/Thomson Financial are 62 cents for the quarter and $2.67 for the year. The company was hurt by slowing sales at stores open at least a year in July, rising labor costs and increasing competition from competitors such as Wal-Mart Stores Inc. Albertson’s has struggled the last three quarters with costs of integrating the American Stores’ chains, which included Lucky supermarkets and Osco drugstores. Albertson’s shares fell $4.94 to close at $26.44 on the NYSE, and tumbled as low as $26 after the close of regular U.S. trading. The Boise, Idaho-based company plans to announce second-quarter earnings Sept. 5.