Albertsons stock gains after profit, sales rise above expectations

Shares of Albertsons Companies Inc. rose 1.0% in premarket trading Tuesday, after the grocery chain, which has agreed to be acquired by Kroger Co. , reported fiscal second-quarter profit and sales that rose above expectations, even as gross margin decreased. Net income for the quarter to Sept. 10 rose to $342.7 million, or 59 cents a share, from $295.2 million, or 52 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 72 cents beat the FactSet consensus of 65 cents. Sales grew 8.6% to $17.92 billion, above the FactSet consensus of $17.71 billion, as same-store sales growth of 7.4% beat expectations of 5.2%. Cost of sales rose more than sales, increasing 9.6% to $12.91 billion, as gross margin contracted to 27.9% to 28.6%. Inventories 5.5% to $4.75 billion, after rising just 1.6% in the first quarter. Albertson's stock has gained 0.4% over the past three months while the S&P 500 has lost 4.0%.

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