American Stores Co. reported a 19 percent increase in first fiscal- quarter earnings and the highest quarterly sales since the fourth quarter of 1989.
First quarter earnings for the period ending May 4 were $64.2 million, or 44 cents per share, compared to $53.9 million, or 37 cents per share, for the same quarter last year, which ended April 29.Comparable sales of replacement stores or outlets open for one year or more were up 4.1 percent. Total first quarter sales of $4.6 billion were 5 percent higher than the $4.4 billion reported in the 1995 first quarter.
"The strength of these results is broad based, with every division showing positive comparable sales," said Victor L. Lund, chairman and chief executive officer of the Salt Lake-based retailer.
The company bought back 726,600 shares of its common stock during the quarter, at an average price of $32.91. Since last June, it has bought back 3.2 million shares at an average price of $29.82.
First-quarter operating profit at American Stores' eastern food operations was up 11.5 percent over the previous year, while the western food operations generated a 31.2 percent gain over the 1995 first quarter.
Operating profit at drug stores increased less than 1 percent.
Total operating profit of $156.8 million was 16.5 percent higher than last year's $134.6 million reported at the end of the first quarter last year.
American Stores opened 10 new stores, remodeled eight and closed another 24 during the quarter. Capital expenditures for the first quarter totaled $181.3 million.
Referring to the company's "re-engineering" plan, called the Delta project, Lund said the program to integrate supply chain functions is on track.
"We implemented the centralization of procurement for beer, liquor and wine categories in January and we expect to have the new systems and processes completely in place for these categories within the next few months," he said. "Preliminary results have been very positive," he added, noting that grocery procurement and replenishment is next on the list.
Lund said recruitment and selection of personnel for the centralized organization in Salt Lake City have been completed and employees are in the process of relocating.
Lund said American Stores is committed to its $900 million capital spending budget for this year in which it plans to open some 100 new stores and remodel 72 others.
American Stores operates 1,636 stores in 25 states. Its principal retail operations include Acme Markets, Jewel Food Stores, Lucky Northern California Division, Lucky Southern California Division, Jewel Osco Southwest, Osco Drug and Sav-on.