US grocer Safeway today (29 April) revealed that its first-quarter income tumbled by one-third despite a slight increase in sales, as margins came under pressure.
The company said that net income fell to US$96m, down from $144.2m for the first quarter of last year.
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Sales were boosted by the higher Canadian exchange rate and increased gas revenues, edging up to $9.3bn from $9.2bn last year.
However, same store sales fell 3.1% in the period, excluding fuel, as the company began to feel the impact of food deflation.
Gross profit margins declined 31 basis points to 28.41% However, excluding the 26 basis point impact from fuel sales, gross profit declined just five basis points as the group increased its investment in advertising.
The company reiterated its full-year EPS guidance range of $1.65-1.85 per share.
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By GlobalDataClick here for the full earnings release, or check back later for post-conference call analysis.
