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Safeway beats forecasts
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July 8, 1999: 10:18 a.m. ET
Supermarket chain reports 22% increase in net income for 2Q
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NEW YORK (CNNfn) - Safeway Inc., one of the largest U.S. grocery store chains, posted a 22 percent increase in second-quarter net income Thursday, surpassing analysts' forecasts by 2 cents per share.
Safeway (SWY) reported net income of $236.4 million, or 46 cents per diluted share, for the quarter ended June 19. That's up from $193.2 million, or 38 cents per share, in the 1998 quarter.
The consensus of analysts polled by the First Call Corp., which tracks corporate results, predicted profit of 44 cents per share.
The results were adjusted to reflect Safeway's $1.2 billion acquisition of Dominick's, the second largest supermarket chain in the Chicago area, in November 1998. Also, Safeway acquired all of the outstanding shares of Carr-Gottstein Foods Co. during the second quarter for about $110 million in cash plus assumed debt.
Second-quarter sales grew 13.5 percent to $6.3 billion, mostly because of the Dominick's acquisition. Same-store sales, or sales at outlets open at least a year, rose 0.7 percent.
On an operating basis, Safeway earned $469.6 million, compared with $380.9 million a year earlier.
For the first half of the year, Safeway earned $442.2 million on a net basis, or 86 cents per share, compared with $358 million, or 71 cents per share, in the year-earlier period. Sales rose to $12.5 billion from $11 billion.
Safeway is the second major U.S. supermarket chain to report results this week. On Wednesday, the Great Atlantic & Pacific Tea Co. (GAP) also beat Wall Street's expectations. The operator of A&P and Waldbaum's stores earned $19.1 million, or 50 cents per share, before charges in its first quarter. Analysts had projected earnings of 48 cents per share.
Safeway shares slid 1-11/16 to 51-5/16 in Thursday morning trading.
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Safeway
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