Albertson’s Ceo Insists Company Is ‘Rock Solid’

Albertson’s, the nation’s fourth-largest food retailer, remains “rock solid” despite a disappointing quarter, Chief Executive Officer Gary Michael told shareholders on Friday.

A day before, Albertson’s, which operates 838 stores in 20 states, reported its first quarterly decline in earnings in at least two decades. The profit was down 2.8 percent, $109.3 million, which company officials attributed to its heavy investments in expansion and new programs to attract customers.

Michael, speaking to about 2,000 shareholders, said Albertson’s remains the most profitable chain in the industry but the results “were not where wanted to be.”

“We have not provided a good return for our shareholders over the last year,” he said. “We need to increase sales, no doubt about that.”

Since announcing last fall that near term financial performance would be lower than analysts had projected, the company has seen its stock price decline by more than a quarter from a high of $43 a share. It closed Thursday at $32.50 per share.

Michael said the company spent $733 million on expansion last year, plans to spend $650 million this year and has budgeted $3.8 billion in capital outlay through 2001.

“We are a great long-term investment and we are building on the future,” he said.

The United Food and Commercial Workers International Union is engaged in a number of legal battles with the company. Michael said about 36,000 of its 90,000 employees are union members.

The union has backed a number of class-action lawsuits, claiming Albertson’s forces a lot of its employees to work “off the clock” or unpaid hours.

Union representative Joe Peterson said Thursday that the union has statements from several thousand former or current Albertson’s employees that workers were forced or coerced into doing more work than they were paid for.

The union took out a full-page ad in The Idaho Statesman on Friday morning urging shareholders to demand answers from the company. Albertson’s also had a full-page ad in the same edition, singling out 18 employees for exceptional service.

Outside the shareholder meeting, Peterson and others passed out a 22-page brochure outlining its complaints against Albertson, although many shareholders refused to accept them.

But when it came time in the shareholder meeting for questions from the floor, the union said nothing.

Among the union’s allegations were claims that store directors or managers have been told that if any workers compensation claims come from their store, they will forfeit their bonuses, which generally are at least several thousand dollars.

“That is absolutely not company policy,” Michael told reporters in a meeting after the shareholder session. He said Albertson’s pays millions of dollars yearly for insurance and claims.

Some stocks that moved substantially or traded heavily Friday:

NYSE

Philip Morris, up 5/8 at 45-3/8

RJR Nabisco, up 1-1/2 at 33-3/8

Loews, up 2-3/4 at 97

The Wall Street Journal reported that negotiators for tobacco makers and state attorneys general suing the industry appear to be nearing a settlement on the contentious issue of liability for smoking-related illnesses.

NASDAQ

Palmer Wireless, up 4-1/16 at 16-1/8

Price Communications (Amex), down 1 at 8-3/8

New York-based Price agreed to acquire Palmer, a cellular phone service provider, for $880 million in cash and assumed debt. Price, which operates television and radio stations. Palmer is based in Fort Myers, Fla.