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Alexkid · 10-13-2011, 01:55 PM

Safeway 3Q profit climbs on improved revenue
SARAH SKIDMORE
(The Associated Press)

04:55:04PM (DST) Thursday,October 12,2011.

PORTLAND, Ore. (AP) — Safeway Inc. says it coming up with new answers as it finds itself facing the same economic challenges that have plagued the grocery industry for years.

It's a tough time for the grocers: shoppers are still carefully watching what they spend, food prices continue to rise and competition is intensifying. The chains that are succeeding have found new ways to do so.

Safeway did not increase its sales volume during its most recent quarter and it saw fewer shoppers in its stores.

But the company managed to increase its fiscal third-quarter profit as it increased its sales of private-label products and relied more on gasoline sales to drive its revenue. It also has also put a heavy emphasis on reducing product loss, due to breakage, theft or other means, to control costs and improve its profitability.

"I think that it's a good assumption, the economy is not going to get materially better and then you've got to play in that environment and utilize the things that you have uniquely developed to win with," Safeway's CEO Steve Burd told investors Thursday. "And, you know, we wish our sales progress was much faster, but we love the fact that it's steady."

Safeway, based in Pleasanton, Calif., reported that its net income rose to $130.2 million, or 38 cents per share, for the period that ended Sept. 10, up from $122.8 million, or 33 cents per share, a year ago.

Revenue climbed 7 percent to $10.06 billion, largely on increased fuel sales and improved sales at established stores.

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 shares rose in morning trading on the news, but dropped later in the day as investors got a bigger, and not necessarily brighter, picture of the quarter and what lies ahead.

Safeway, like all grocers, has been struggling with higher food prices. While the company has passed along most of these price increases, this has continued to dampen the supermarket's performance.

Its gross margin fell to 27 percent from 28.1 percent in the third quarter. Fuel sales caused a 0.88 percentage point drop, and the cost of goods sold rose 8.8 percent.

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People shop where the bargains are with double coupons-in store special sales.

10-13-2011, 01:55 PM	#1
Alexkid Your World & Experience Join Date: Jan 2009 Location: Eastern Time Zone Posts: 6,859 Rep Power: 10	Safeway 3Q profit climbs Safeway 3Q profit climbs on improved revenue SARAH SKIDMORE (The Associated Press) 04:55:04PM (DST) Thursday,October 12,2011. PORTLAND, Ore. (AP) — Safeway Inc. says it coming up with new answers as it finds itself facing the same economic challenges that have plagued the grocery industry for years. It's a tough time for the grocers: shoppers are still carefully watching what they spend, food prices continue to rise and competition is intensifying. The chains that are succeeding have found new ways to do so. Safeway did not increase its sales volume during its most recent quarter and it saw fewer shoppers in its stores. But the company managed to increase its fiscal third-quarter profit as it increased its sales of private-label products and relied more on gasoline sales to drive its revenue. It also has also put a heavy emphasis on reducing product loss, due to breakage, theft or other means, to control costs and improve its profitability. "I think that it's a good assumption, the economy is not going to get materially better and then you've got to play in that environment and utilize the things that you have uniquely developed to win with," Safeway's CEO Steve Burd told investors Thursday. "And, you know, we wish our sales progress was much faster, but we love the fact that it's steady." Safeway, based in Pleasanton, Calif., reported that its net income rose to $130.2 million, or 38 cents per share, for the period that ended Sept. 10, up from $122.8 million, or 33 cents per share, a year ago. Revenue climbed 7 percent to $10.06 billion, largely on increased fuel sales and improved sales at established stores. 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 shares rose in morning trading on the news, but dropped later in the day as investors got a bigger, and not necessarily brighter, picture of the quarter and what lies ahead. Safeway, like all grocers, has been struggling with higher food prices. While the company has passed along most of these price increases, this has continued to dampen the supermarket's performance. Its gross margin fell to 27 percent from 28.1 percent in the third quarter. Fuel sales caused a 0.88 percentage point drop, and the cost of goods sold rose 8.8 percent. ---------------------------------------------------- People shop where the bargains are with double coupons-in store special sales. __________________ Yeah...Do That.

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