Safeway Inc. saw its shares slide today (3 March) as the US retailer outlined its profit guidance for 2010.
Shares in the US retailer dropped 1.3% to US$24.55 at 10:25 ET, as the firm issued earnings per share guidance of $1.65 – $1.85 per diluted share.
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Analysts on average were looking for $1.85, according to a Thomson Reuters forecast.
The guidance reflects identical-store sales growth, excluding fuel, of 0-1% in 2010, Safeway said.
The retailer has targeted a change in operating profit margin -10 to +5 basis points and cash capital expenditures of around $900m-1bn. Safeway also forecast free cash flow of $900m-1.1bn.
“With the accomplishments we achieved in a difficult 2009, we are confident we have laid the foundation to grow our business,” said Steve Burd, chairman, president and CEO.
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By GlobalData“We invested in lowering our prices on everyday items, and we also continued to invest in transforming our store base. With 79% of our store base remodelled into Lifestyle stores, we believe we have the freshest asset base in the supermarket industry, and combined with our differentiated offering and lower pricing, we believe we are very well positioned for future growth.”
The retailer last week posted a fourth-quarter net loss of US$1.61bn due to a goodwill impairment charge of $1.82bn.
Excluding that charge, net income would have stood at $209.1m. Net income in the fourth quarter of 2008 was $338m.
Sales declined 8.1% to $12.7bn in the fourth quarter of 2009 due to an additional week in 2008 and a 4.1% fall in identical-store sales, excluding fuel.
Check back later for further insight into Safeway’s 2010 earnings guidance.
