Safeway Inc.’s moves to write down the value of two of its chains have led the US retail giant to swing to a loss in the last three months of 2009.
The company today (25 February) posted a fourth-quarter net loss of US$1.61bn due to a goodwill impairment charge of $1.82bn.
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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.
“Excluding the non-cash goodwill impairment charge, our results were in line with our expectations,” said Steve Burd, chairman, president and CEO. “Despite very challenging economic conditions, Safeway generated free cash flow of $1.5bn in 2009. This exceeded our expectations and is the highest annual free cash flow ever achieved by Safeway.”
Click here for the full earnings release from Safeway and click here for Steve Burd’s thoughts on whether deflation will persist in 2010.
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