US: Safeway: We expect Albertsons deal to close in Q4
Regulators have asked for information over plans to combine Safeway with Cerberus chains
Safeway has insisted it still expects its sale to US private-equity group Cerberus Capital Management to close in the fourth quarter.
The US retailer announced last month it had agreed to an offer from Cerberus, which owns chains including Albertsons, Acme and Jewel-Osco.
Adding Safeway to those chains would create a business with over 2,400 stores and regulators are looking at the deal. Last week, the US Federal Trade Commission asked Safeway for more information on the plans to combine the businesses.
However, announcing its financial results for the 12 weeks to 22 March, Safeway said it still sees the deal closing in the last three months of the year.
Foreign currency translation meant Safeway reported a loss from continuing operations of US$83.1m for the quarter. Excluding "unusual items" in the first quarters of 2013 and 2014, Safeway booked income from continuing operations of $12.8m compared to a $37.5m a year earlier.
Sales and other revenue increased 1% to $8.3bn, primarily due to a 1.8% rise in identical-store sales, excluding fuel. The growth in identical-store sales was due to a one point increase in price per item and a 0.8 point rise in volume.
Gross profit margins declined 34 basis points to 26.15%.
Safeway president and CEO Robert Edwards said: "While sales met plan in the first quarter, income was slightly below plan, in part as a result of inflation in produce, meat and pharmacy that was not fully passed along for competitive reasons. In the second quarter of 2014, identical-stores sales are currently running well above 2%, and we expect to pass along most of the inflation we are experiencing."
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