Albertsons Inc., the No. 2 U.S. grocer, on Tuesday reported a sharp slide in quarterly profit, hit by heavy promotions to revive its Southern California sales after a strike.
The Boise, Idaho-based grocer, which operates 2,500 stores under the Albertsons, Jewel-Osco, Shaw's and other names, said profit in the second quarter ended on July 29 fell to $125 million, or 34 cents a share, from $162 million, or 44 cents a share, a year earlier.
The analysts' average forecast was 33 cents a share, according to Reuters Estimates.
Albertsons said the Southern California labor dispute cut earnings by 13 cents a share in the quarter. The company also contributed an additional $7 million to two Northern California health and welfare union plans, which reduced earnings by a penny a share.
Excluding these items, Albertsons earned $180 million, or 48 cents a share.
The company's exits from the Omaha and New Orleans markets also reduced net earnings by 6 cents a share, due to noncash impairment write-downs from the sale of property and equipment.
Sales rose to $10.2 billion from $9 billion a year earlier.
