|
Safeway boosts buyback
|
 |
September 28, 2001: 10:11 a.m. ET
Supermarket chain adds $500M to repurchase shares; 3Q meets target
|
NEW YORK (CNNfn) - Safeway Inc. is increasing its stock buyback program by $500 million, the company said Friday, as it announced third-quarter earnings in line with Wall Street expectations.
Pleasanton, Calif.-based Safeway (SWY: up $0.99 to $39.49, Research, Estimates), one of the nation's biggest supermarket operators, said it's board had authorized increasing the share repurchase program to $1.5 billion from the previously announced $1 billion.
The company's shares rose 99 cents in early trading Friday following the announcement.
Safeway posted third-quarter earnings of $309.2 million, or 60 cents a share, up from $270 million, or 53 cents a share, a year earlier. Analysts anticipated a profit of 60 cents a share, according to earnings tracker First Call.
Third-quarter sales increased 6.8 percent to $8 billion from $7.5 billion. The company attributed the sales increase mainly to its February acquisition of Genuardi's, a smaller chain.
Sales at stores open at least a year, a key gauge for retailers, increased 1.6 percent in the quarter.
Safeway is the latest in a horde of companies to step up or accelerate buyback plans since the Sept. 11 terrorist attacks on New York and Washington.
Companies are reducing the number of shares outstanding in an effort to stabilize their stock as many economists are predicting the attacks will propel the United States into a recession.
Consumer spending fell sharply after the attacks. Though retail stocks have taken a hit on fears of a consumer slowdown, analysts have said supermarkets, discount chains and drugstores that sell food, pharmaceuticals and other basic items are likely to weather a slowdown better than department stores since people need these items regardless of the economy.
So far, Safeway has repurchased $842 million of its common stock, leaving $658 million available under the new authorization, the company said.
"The increased authorization of our stock repurchase program reflects the board's continued high level of confidence in the growth prospects of the company," CEO Steve Burd said. "Current market conditions provide an excellent opportunity for us to buy back our shares." 
|
|
|
|
|
 |
|
