Food and drug retailer American Stores Co. posted lower second-quarter profits versus last year as aggressive promotional spending against to supermarket competition subtracted from strong gains in its pharmacy sales.
American Stores, which operates Lucky, Jewel and Acme supermarket chains, said it earned $88 million, or 32 cents a diluted share, on sales of $4.95 billion for its second fiscal quarter.
Salt Lake City-based American, which earlier this month agreed to an $11.7 billion merger with supermarket giant Albertson’s, said pharmacy sales from stores open at least a year or same-store sales, were up 18.4 percent. But its overall profit margin declined 26.7 percent in the second quarter from 27 percent a year ago due to an aggressive pricing and promotional strategy in food stores.
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