The US’s second largest retailer raised its earnings outlook for the full year when it announced today (20 July) that its second quarter income increased by more than 80% on the back of higher sales, lower costs and one-off items.

Sales for the three months ended 17 June rose from $8.8bn in the comparable period of last year to $9.37bn. Same-store-sales rose by 4.2% excluding fuel.

The company said that profits in the quarter rose to US$246.2m, or 55 cents a share, up from $134m, or 30 cents a share, last year. Interest earned on a tax refund added 13 cents a share.

“These improved results were driven by strong sales growth, a healthy expansion in non-fuel gross margin and significant operating and administrative expense leverage,” said Steve Burd, chairman and chief executive.
Safeway raised its 2006 financial guidance from $1.65 to $1.75 per share, excluding the 13 cent impact of the favourable tax settlement, up from $1.55 to $1.65 per share.

At time of press, shares in Safeway had risen 6.82% to $27.42.