Thursday before the bell, food and drug retailer Safeway Inc. (SWY) posted higher second-quarter profits, citing the increase in sales in Lifestyle stores, higher fuel sales, the favorable impact from the increase in the Canadian dollar exchange rate. The shift of the Easter holiday sales to the second quarter also favorably impacted the results.
Net income rose to $234.3 million or $0.53 per share from $218.2 million or $0.49 per share in the year ago period.
On average, 11 analysts polled by First Call/Thomson Financial, expected the company to report earnings of $0.52 a share for the latest quarter.
Sales increased 3% to $10.12 billion from $9.82 billion last year, but came in below analysts' expectations for $10.23 billion.
Identical store sales, which exclude replacement stores, increased 0.9% year-over-year. Excluding fuel sales, identical store sales decreased 0.3% from last year.
Operating profit rose to $451.6 million from $422.4 million in the prior year quarter.
Steve Burd, the Chairman, President and Chief Executive Officer of Safeway said, "Our earnings performance this quarter was strong in light of a soft sales environment and the Easter holiday shift."
Net income for the six months ended increased to $427.7 million or $0.97 per share from $392.6 million or $0.88 per share in the same period last year.
Year-to-date sales climbed to $20.12 billion from $19.15 billion in the comparable year-ago period.
Safeway reaffirmed its full-year earnings guidance of $2.25 - $2.35 a share. Analysts expect earnings of $2.28 a share for the full year.
The company revised its guidance for identical-store sales growth, excluding fuel, to a range of a range of 1-2% from 2-2.3%.
SWY is trading down $3.44 or 11.46% at $26.57.
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