Albertsons 2007 Annual Report Download - page 27

prices and modest product cost inflation. For fiscal 2008, we expect consumer spending will be impacted by high
f
ue
l
pr
i
ces, cont
i
nue
df
oo
di
n
fl
at
i
on an
d
t
h
eso
f
t
h
ous
i
ng mar
k
et
.
T
h
e Compan
y
’s P
l
a
n
We
b
e
li
eve we can
b
e success
f
u
l
a
g
a
i
nst t
hi
s
i
n
d
ustr
yb
ac
kd
rop w
i
t
h
our re
gi
ona
l
reta
il f
ormats t
h
at
f
ocus o
n
l
ocal execution, merchandisin
g
and consumer knowled
g
e. In addition, our operations will benefit from our
e
ffi
c
i
ent an
dl
ow-cost supp
l
yc
h
a
i
nan
d
new econom
i
es o
f
sca
l
easwe
l
everage our Reta
il f
oo
d
an
d
Supp
l
yc
h
a
i
n
serv
i
ces operat
i
ons. We p
l
an to expan
d
re
gi
ona
l
reta
il b
anner square
f
oota
g
et
h
rou
gh
se
l
ect
i
ve new store
g
rowt
h
in ke
y
markets where we have si
g
nificant market share. The Acquisition has si
g
nificantl
y
expanded our retail
presence an
d
t
h
e num
b
er o
f
stores we operate. Save-A-Lot, our
li
m
i
te
d
assortment
f
ormat, current
l
y operates
in
42 states. In a
ddi
t
i
on, we w
ill
supp
l
ement re
gi
ona
l
reta
il
store
g
rowt
h
w
i
t
h
cont
i
nue
df
ocus on remo
d
e
l
act
i
v
i
t
i
es
.
Given the life c
y
cle maturit
y
of our Suppl
y
chain services business with its inherent attrition rate, future
g
rowth
i
n
f
oo
ddi
str
ib
ut
i
on w
ill b
emo
d
est an
d
pr
i
mar
il
yac
hi
eve
d
t
h
roug
h
serv
i
ng new
i
n
d
epen
d
ent customers, net
g
rowt
hf
rom ex
i
st
i
n
g
customers an
df
urt
h
er conso
lid
at
i
on opportun
i
t
i
es.
R
E
S
ULT
S
OF OPERATION
S
H
i
g
hli
g
hts of results of operations as reported and as a percent of net sales are as follows
:
February
24,
200
7
(52 weeks
)
February
2
5
,
2006
(52 weeks
)
February
26
,
2005
(52 weeks
)
(
In milli
o
n
s)
(os)
%
Net sales $37,406 100.0% $19,864 100.0% $19,543 100.0
C
ost of sales 29,267 78.2 16,977 85.5 16,681 85.
4
Selling and administrative expenses
6
,834 18.3 2,448 12.3 2,229 11.
4
Gain on sale of WinCo Foods
,
Inc. — — — — 109 0.6
R
estructure and other char
g
es — — 4 — 26 0.1
Operatin
g
earnin
g
s $ 1,305 3.5 $ 435 2.2 $ 716 3.7
I
nterest expense
6
00 1.
6
139 0.7 138 0.7
I
nterest
i
ncome 42
0
.1
33 0
.2 2
30
.1
Earnings before income taxes
$
747 2.0
$
329 1.7
$
601 3.1
I
ncome tax ex
p
ense 29
5
0.8 123 0.6 21
5
1.1
%
Net earnin
g
s $ 452 1.2% $ 206 1.1% $ 386 2.0
Net earnin
g
s per common share – diluted $ 2.32 $ 1.46 $ 2.7
1
Comparison of fifty-two weeks ended February 24, 2007
(
fiscal 2007
)
with fifty-two weeks ende
d
Februar
y
25, 2006 (fiscal 2006):
I
n fiscal 2007, the Company achieved net sales of
$
37,406 compared with
$
19,864 last year. Net earnings for
f
iscal 2007 were $452 and diluted earnin
g
s per share were $2.32 compared with net earnin
g
s of $206 and diluted
earnings per share of
$
1.46 last year. Results for fiscal 2007 include Acquisition-related costs (defined a
s
o
ne-time transaction costs, which primarily include retention bonuses and consultant fees) of
$
40 after tax,
char
g
es related to the Compan
y
’s plan to dispose of 18 Scott’s banner stores (“Scott’s”) of $23 after tax an
d
i
ncrementa
l
stoc
k
opt
i
on expense re
l
ate
d
to t
h
e Company’s a
d
opt
i
on o
f
Statement o
f
F
i
nanc
i
a
l
Account
i
n
g
Standards (“SFAS”) No. 123 (Revised 2004), “Share Based Payment” (“SFAS No. 123(R)”) of $15 after tax
.
R
esults for fiscal 2006 included char
g
es of $111 after tax primaril
y
related to Chica
g
o and Pittsbur
g
h.
21