Safeway: Q2 Proft Down, Shares Fall

by Christopher Freeburn | July 19, 2012 1:53 pm

Grocery chain operator Safeway (NYSE:SWY[1]) said today that it earned $122.7 million during the second quarter[2], down 16% from $145.8 million last year.

For the quarter, the chain, which operates 1,700 stores in North America, recorded sales of $10.39 billion, up 2% from 2011, beating analysts’ estimates, the Associated Press noted.

Adjusted EPS for the second-quarter was 50 cents, which narrowly topped Wall Street’s forecast of 49 cents.

Investors were unhappy with the results, sending Safeway shares down about 6% in Thursday afternoon trading.

Excluding fuel expenses, same-store sales increased 0.8% over last year.

During the quarter, Safeway repurchased 11.6 million shares at a cost of $240.4 million.

Grocery chains have been fighting increased competition from big-box retailers like Wal-Mart (NYSE:WMT[3]), Costco (NASDAQ:COST[4]) and Target (NYSE:TGT[5]), which carry an increasing variety of food products.

Industry watchers say that supermarkets have slipped from 66% of food product sales in 2000, to just 51% today.

Last month, Safeway announced plans to introduce its own branded coffees in single serving containers[6] compatible with Green Mountain Coffee Roasters‘s (NASDAQ:GMCR[7]) Keurig coffee machines.

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