Grocery chain operator Safeway (NYSE:SWY) said today that it earned $122.7 million during the second quarter, 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), Costco (NASDAQ:COST) and Target (NYSE:TGT), 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 compatible with Green Mountain Coffee Roasters‘s (NASDAQ:GMCR) Keurig coffee machines.