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Longs Has a Profit as Sales Increase

The drugstore operator lowers full-year forecasts on expectations that tough retail conditions will continue.

May 20, 2003|From Bloomberg News

Longs Drug Stores Corp., which operates 461 stores in the Western U.S., said it had a fiscal first-quarter profit of $5.83 million as sales rose. The retailer lowered its full-year earnings and revenue forecasts.

Net income was 16 cents a share, contrasted with a loss of $13.7 million, or 36 cents, a year earlier, the company said. Sales in the three months ended May 1 rose to $1.1 billion from $1.09 billion. A year earlier, Longs had costs to write down the value of store acquisitions.

Longs blamed unemployment in California, continued consumer worries about the economy and the war in Iraq for reducing first-quarter sales. The company is trying to cut costs as well as make changes to its stores to boost sales.

"We do expect a continuation of the tough sales environment on the West Coast," said President and Chief Executive Officer Warren Bryant in a conference call with analysts and investors.

Longs said that full-year profit would be 84 to 90 cents a share and that same-store sales would be little changed or fall 2%. In February, the retailer had forecast profit of 89 to 96 cents and said same-store sales would rise by as much as 3%.

Shares of Walnut Creek, Calif.-based Longs fell 56 cents to $14.92 on the New York Stock Exchange on Monday. They dipped to $14.50 in after-hours trading. The company's results were released after the close of regular U.S. trading.

Sales at stores open at least a year fell 0.8% in the quarter as sales of non-pharmacy items dropped 2.9%. So-called same-store sales are considered a key indicator for retailers because they exclude new and closed locations.

Longs said it had first-quarter pretax costs of $6 million, or 10 cents a share, for the previously announced elimination of 170 jobs and the shedding of a pharmacy information system. The company also said it repurchased 1.36 million shares during the quarter.

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