Albertsons 2010 Annual Report Download - page 26

Comparison of fifty-two weeks ended February 27, 2010 (fiscal 2010) with fifty-three weeks ended Febru-
ary 28, 2009 (fiscal 2009):
For fiscal 2010, Net sales were $40,597, compared with $44,564 last year. Net earnings for fiscal 2010 were
$393 and diluted net earnings per share were $1.85, compared with net loss of $2,855 and diluted net loss per
share of $13.51 last year. Results for fiscal 2010 include net charges of $62 before tax ($39 after tax, or $0.18
per diluted share) related to the planned retail market exits, closure of non-strategic stores announced in fiscal
2009 and fees received from the early termination of a supply agreement. Results for fiscal 2009 include
charges of $3,762 before tax ($3,470 after tax, or $16.40 per diluted share) comprised of goodwill and
intangible asset impairment charges of $3,524 before tax ($3,326 after tax, or $15.71 per diluted share),
charges primarily related to the closure of non-strategic stores announced in fiscal 2009 of $200 before tax
($121 after tax, or $0.58 per diluted share), settlement costs for a pre-Acquisition Albertsons litigation matter
of $24 before tax ($15 after tax, or $0.07 per diluted share) and other Acquisition-related costs (defined as
one-time transaction costs, which primarily include supply chain consolidation costs, employee-related benefit
costs and consultant fees) of $14 before tax ($8 after tax, or $0.04 per diluted share).
Net Sales
Net sales for fiscal 2010 were $40,597, compared with $44,564 last year. Retail food sales were 77.9 percent
of Net sales and Supply chain services sales were 22.1 percent of Net sales for fiscal 2010, compared with
77.8 percent and 22.2 percent, respectively, last year.
Retail food sales for fiscal 2010 were $31,637, compared with $34,664 last year. Approximately $578 of fiscal
2009 Retail food sales is attributable to the extra week. The remaining decrease primarily reflects negative
identical store retail sales growth (defined as stores operating for four full quarters, including store expansions
and excluding fuel and planned store dispositions) and the impact of store dispositions. For fiscal 2010, as
compared to fiscal 2009, identical store retail sales growth was negative 5.1 percent based on the same 52-
week period for both years. Identical store retail sales performance was primarily the result of a challenging
economic environment, heightened competitive activity and investments in price and promotions.
During fiscal 2010, the Company added 40 new stores through new store development and sold or closed 112
stores, including planned dispositions.
Total retail square footage as of the end of fiscal 2010 was approximately 65 million, a decrease of 6.2 percent
from the end of fiscal 2009. Total retail square footage, excluding actual and planned store dispositions,
increased 0.8 percent from the end of fiscal 2009.
Supply chain services sales for fiscal 2010 were $8,960, compared with $9,900 last year. Approximately $165
of fiscal 2009 Supply chain services sales is attributable to the extra week. The remaining decrease primarily
reflects the completion of a national retail customer’s previously announced plans to transition certain volume
to self-distribution.
Gross Profit
Gross profit, as a percent of Net sales, was 22.5 percent for fiscal 2010 compared with 22.7 percent last year,
primarily reflecting a higher promotional sales mix and increased investments in price, partially offset by a
lower LIFO charge.
Selling and Administrative Expenses
Selling and administrative expenses, as a percent of Net sales, were 19.6 percent for fiscal 2010, compared
with 19.6 percent last year. Savings from ongoing cost-reduction initiatives and lower store disposition-related
costs compared to last year were offset by reduced sales leverage.
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