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Related Categories: California | Labor & Workers
Kroger: Strikes contributed to $337.4 million quarterly loss
by JankyHellface (repost)
Wednesday Mar 10th, 2004 11:10 AM
Kroger Co. said Tuesday that labor unrest, including a 4 1/2 monthlong strike in southern California, contributed to a loss of $337.4 million in the fourth quarter. The retail grocer also said it expects its 2004 results to be lower than in 2003. Kroger is the parent of the Valley's Fry's food stores.
CINCINNATI - Kroger Co. said Tuesday that labor unrest, including a 4 1/2 monthlong strike in southern California, contributed to a loss of $337.4 million in the fourth quarter. The retail grocer also said it expects its 2004 results to be lower than in 2003. Kroger is the parent of the Valley's Fry's food stores.

For the three months ending Jan. 31, the company lost 45 cents per share. A year earlier, earnings were $381 million, or 50 cents per share.

The labor disputes reduced Kroger's earnings by $156.4 million after taxes. In addition to the strike settled less than two weeks ago involving Kroger's Ralph stores in southern California strike, about 3,300 union members from 44 stores in Kentucky, Ohio and West Virginia also walked for nearly two months over medical benefits.

Kroger also cited other expenses that collectively reduced after-tax earnings by $663.1 million, or 89 cents per diluted share, including a $444.2 million charge for its Smith's division and $75 million for a write-down for 74 under-performing stores.

Still, sales for the latest quarter increased 4.5 percent to $13 billion, including stores affected by the strikes.

Shares of Kroger traded at $18.91, unchanged, in morning trading on the New York Stock Exchange.

For all of fiscal 2003, earnings were $314.6 million, or 42 cents per share. Sales increased 4 percent to $53.8 billion. The 2004 results included charges of $801.3 million after tax, or $1.06 per share, for expenses including the strikes, asset write-down and resolving disputes involving energy supply arrangements.

Kroger said it expects earnings in 2004 to be lower than in 2003, excluding the effect of the strikes and other expenses. David B. Dillon, chief executive officer, said Kroger cannot be more precise about earnings expectations because of uncertainties involving the cost of the Southern California strike, expense of rebuilding Ralphs' business and investment needed to increase Kroger's sales companywide.

Kroger expects to reduce its costs this year in administration, labor, warehousing and transportation, Dillon said, without releasing any details.

The Cincinnati-based company operates 2,532 supermarkets and multi-department stores in 32 states under the names Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith's, Fry's, Fry's Marketplace, Dillons, QFC and City Market. Its business also includes 802 convenience stores, 440 jewelry stores, 466 supermarket fuel centers and 41 food processing plants.
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