Bloomberg News

Safeway Rises Most Since 2000 After Profit Tops Estimates

February 21, 2013

Safeway Inc. (SWY:US) advanced the most ever after the second-largest U.S. grocery chain reported fourth- quarter profit that exceeded analysts’ estimates on higher stores sales.

The shares (SWY:US) climbed 14 percent to $22.97 at the close in New York for the biggest gain since the company’s 1990 initial public offering.

Safeway is working to compete with big-box retailers such as Wal-Mart Stores Inc. (WMT:US) with its grocery and fuel loyalty programs. Last month, Safeway announced Chief Executive Officer Steven Burd will retire in May after 20 years at the company. A replacement hasn’t been announced.

Net income (SWY:US) in the quarter ended Dec. 29 rose 13 percent to $244 million, or $1.02 a share, from $215.6 million, or 67 cents, a year earlier, the Pleasanton, California-based company said in a statement today. Excluding gains from legal settlements profit was 94 cents a share. Analysts estimated 76 cents, the average of 19 projections compiled by Bloomberg.

Revenue increased 1.2 percent to $13.8 billion, helped by higher gift and prepaid card sales and an 0.8 percent gain in identical-store sales, excluding fuel.

Safeway has advanced 27 percent this year, compared with a gain of 4.4 percent for the Standard & Poor’s 500 Food Retail Index.

The company has about 1,640 stores in the U.S. and Canada. Kroger Co. (KR:US) is the biggest U.S. grocery-store chain.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • SWY
    (Safeway Inc)
    • $34.7 USD
    • -0.03
    • -0.09%
  • WMT
    (Wal-Mart Stores Inc)
    • $74.96 USD
    • 0.08
    • 0.11%
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