US supermarket chain Safeway has reported flat same-store sales for the first quarter and forecast first-quarter earnings from continuing operations of between 43 cents and 45 cents per share.

The company said preliminary earnings are lower than last year due to lower gross margins and higher operating and administrative expenses as a percentage of sales.

“While same-store sales trends improved over fourth quarter levels, the issues related to our centralised marketing organisation had a greater impact on gross margins than we expected,” Steve Burd, chairman, president and chief executive, was quoted by Dow Jones News as saying. “This gross margin shortfall was due to learning curve issues in the new organisation.”

Thomson First Call has forecast first-quarter earnings of 54 cents a share excluding goodwill. Last year the company earned 67 cents a share before an accounting charge.