US: Safeway Q1 profit climbs, sales dip
- Net profit jumps to US$118.9m
- Operating profit falls 5.3%
- Net sales remain relatively flat
Safeway said it continued to see market share gains in the first quarter
US retailer Safeway Inc has recorded an increase in first-quarter earnings, despite a dip in sales.
In the three months ended 23 March, net profit jumped to US$118.9m from $72.9m last year, as the period included a 14-cent-per-share tax benefit. Operating profit, however was down 5.3% to $179.8m.
Total sales were essentially flat in the period, dropping slightly to $9.99bn from $10bn last year. The retailer recorded an identical-store sales increase of 1.5%, which was offset primarily by the disposition of Genuardi's stores in 2012 and lower fuel sales in 2013.
"We are pleased that we continued to see market share gains in the first quarter," said outgoing CEO Steve Burd. "Just for U usage continues to grow, and our partner fuel reward programme is rolling out on schedule and resonating well with consumers."
Safeway Inc. Announces First Quarter 2013 Results
U.S. Market Share Gains Continue
PLEASANTON, CA -- (Marketwired) -- 04/25/13 -- Safeway Inc. (NYSE: SWY)
Safeway Inc. Announces First Quarter 2013 Results U.S. Market Share Gains Continue PLEASANTON, CA -- (Marketwired) -- 04/25/13 -- Safeway Inc. (NYSE: SWY)
Results From Operations Safeway Inc. today reported net income of $0.49 per diluted share for the first quarter of 2013. This includes tax benefits of $0.14 per diluted share, of which $0.07 was contemplated in our annual guidance. These results compare with income from continuing operations in the first quarter of 2012 of $0.30 per diluted share. Other highlights of the quarter include:
Our fourth consecutive quarter of U.S. market share gains in both the supermarket channel and in all outlets.
An identical-store sales increase of 1.5% (excluding fuel), which was positively impacted by a calendar shift* of 0.4% and negatively impacted by a shift to generic drugs of 0.9%.
A unit volume increase of 0.5%, which was also positively impacted by the calendar shift.*
"We are pleased that we continued to see market share gains in the first quarter," said Steve Burd, Chairman and CEO. "Just for U™ usage continues to grow, and our partner fuel reward program is rolling out on schedule and resonating well with consumers."
"In addition," said Burd, "the successful IPO of Blackhawk Network Holdings last week highlights the value we are creating for our stockholders. The proceeds from our sale of Blackhawk stock were used to pay down debt."
Sales and Other Revenue Total sales were $10.0 billion in the first quarter of 2013, essentially flat compared to the first quarter of 2012. An identical-store sales increase of 1.5% (excluding fuel) was offset primarily by the disposition of Genuardi's stores in 2012 and lower fuel sales in 2013.
- Safeway's fiscal year 2012 ended on December 29, 2012 and therefore did not capture all New Year's holiday sales. These sales fell into the first quarter of 2013. Identical-store sales and unit volume were positively impacted by 0.4% as a result of this shift.
Gross Profit Gross profit declined 14 basis points to 26.70% of sales in the first quarter of 2013 compared to 26.84% of sales in the first quarter of 2012. Excluding the 15 basis-point impact from fuel sales, gross profit declined 29 basis points due primarily to investments in price, partially offset by improved pharmacy gross margin and reduced advertising expense.
Operating and Administrative Expense Operating and administrative expense decreased five basis points to 24.90% of sales in the first quarter of 2013 from 24.95% of sales in the first quarter of 2012. Excluding the 17 basis-point impact of lower fuel sales, operating and administrative expense margin decreased 22 basis points primarily due to lower depreciation, utilities and other store occupancy costs.
Operating Profit Operating profit margin declined 10 basis points to 1.80% in the first quarter of 2013 from 1.90% in the first quarter of 2012. Excluding fuel, operating profit declined seven basis points.
Interest Expense Interest expense decreased to $65.0 million in the first quarter of 2013 from $71.4 million in the first quarter of 2012 because of lower average interest rates and lower average borrowings.
Original source: Safeway Inc
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