Supermarket shares slump on Albertson’s profit warning

Wednesday, Aug. 23, 2000 | 11:15 a.m.

SUN STAFF AND WIRE REPORTS

Shares of Albertson's Inc., the country's second largest supermarket chain, slumped 17 percent Tuesday and fell another 14 percent this morning after announcing that its second quarter earnings would fall short of Wall Street estimates because of higher-than-expected costs and lower-than-expected sales.

Albertson's blamed the results on the entry of new competitors in its markets. The Boise, Idaho-based company said it expects to report earnings of 50 cents a share for its second quarter ended Aug. 3. Analysts polled by research firm First Call/Thomson Financial expected Albertson's to make 62 cents a share.

Shares of Albertson's plunged $5.375, or 17.1 percent, to $26 apiece late Tuesday on the Nasdaq Stock Market.

The shares traded this morning at $22.75, down another 14 percent.

In the Las Vegas area, Albertson's operates some 29 Albertson's grocery stores and another 47 Sav-On drugstores.

The Albertson's news was blamed for declines in the stocks of competitors Kroger Co. of Cincinnati and Safeway Inc. of Pleasanton, Calif.

Kroger fell 7.9 percent to $21.19 this morning. Kroger owns the Smith's Food & Drug supermarkets and Pricerite warehouse stores in the Las Vegas market. Safeway, owner of Vons markets in Las Vegas, saw its stock fall 6.6 percent this morning to $48.56.