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Albertson's Drops on Outlook

The company swings to a first-quarter profit, but cuts its full-year guidance.

Grocery store chain



swung to a first-quarter profit, but the company cut its full-year guidance, citing "a more cautious consumer."

Shares of the company were down 10% in morning trading at $19.56. Meanwhile, shares of rival


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were down 2.8% at $16.13.

In the period ended May 1, Albertson's earned $172 million, or 47 cents a share, up from last year's loss of $165 million, or 40 cents a share. Analysts were expecting the company to earn 50 cents a share.

Sales were $8.94 billion, flat with last year's $8.92 billion. Comparable-store sales fell 0.9%, and identical store sales declined 1.2%, the company said.

"The first quarter yielded a much tougher-than-expected economic and competitive climate. Even as the war ended, we saw no improvement," said Larry Johnston, chief executive. Still, Albertson's opened 32 new food and drug stores during the quarter, while it closed 22 and remodeled 45.

Looking to full-year earnings, Albertson's expects to earn $1.70 to $1.75 a share. Analysts expect $2.04 a share, on average. The company earned $2.13 a share in the prior year. In March, the Boise, Idaho-based company had forecast full-year earnings of $2.08 to $2.13 a share.