Tags: Earns | Safeway

Safeway Profit Climbs on Cost Cutting Efforts

Thursday, 13 Oct 2011 10:54 AM

Safeway Inc.'s fiscal third-quarter profit rose 6 percent as the grocery chain generated stronger revenue in part from increased gasoline sales and cost control efforts.

The results beat Wall Street expectations, and its shares rose almost 4 percent in morning trading Thursday.

"Our sales momentum continued to build in the third quarter, and our costs were well controlled," Chairman, President and CEO Steve Burd said in a statement.

The operator of Von's, Dominicks, Safeway and other grocery chains also reaffirmed its full-year earnings forecast and guidance for revenue at stores open at least a year.

The Pleasanton, Calif., company reported net income of $130.2 million, or 38 cents per share, for the period ended Sept. 10. That's up from $122.8 million, or 33 cents per share, a year ago.

Revenue climbed 7 percent to $10.06 billion from $9.4 billion on increased fuel sales, an uptick in a key revenue metric, a higher Canadian exchange rate and a change in reporting gift card commissions.

Revenue at stores open at least a year increased 1.5 percent, when excluding fuel.

This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

The results topped analysts' average expectations for earnings of 35 cents per share on revenue of $9.85 billion, according to a survey by FactSet.

Safeway's stock rose 68 cents, or 3.8 percent, to $18.65 in morning trading. The shares have traded in a range of $15.93 to $25.43 over the past year.

Safeway still expects full-year earnings between $1.45 and $1.65 per share and revenue at stores open at least a year to be up about 1 percent when removing fuel.

Analysts predict full-year earnings of $1.66 per share.

Safeway runs 1,681 stores in the United States and Canada.

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Safeway Inc.'s fiscal third-quarter profit rose 6 percent as the grocery chain generated stronger revenue in part from increased gasoline sales and cost control efforts. The results beat Wall Street expectations, and its shares rose almost 4 percent in morning trading...
Earns,Safeway
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2011-54-13
Thursday, 13 Oct 2011 10:54 AM
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