US grocery retailer Safeway has forecast 2004 earnings below expectations and said it cannot estimate what impact the strike in southern California will have on its earnings.
For 2004, the company has forecast earnings per share of $1.95 to $2.03, excluding any impact from the southern California strike. The guidance includes Dominick’s as part of continuing operations. Analysts had estimated earnings in a range of $1.76 to $2.23 per share, with an average of $2.05, reported Reuters.
The company also announced that it plans to spend approximately $1.2bn to $1.4bn in cash capital expenditures in 2004 and plans to open approximately 45 new stores and remodel 160 to 165 stores.
“We expect 2004 to be a busy year for Safeway, as we continue to refine and execute our growth strategy,” said CEO Steve Burd. “The soft economy has continued to impact our business, and it is unclear when unemployment levels in our markets will improve. In the meantime, we are planning to continue to differentiate our customer offering in order to restore steady growth to our business.”
For the fourth quarter to 29 November 2003, Safeway said its identical store sales, excluding strike affected stores, increased 0.9% excluding Dominick’s, and increased 0.4% including Dominick’s.
Excluding the effect of fuel sales, identical store sales slid 0.8% excluding Dominick’s, and declined 1.2% including Dominick’s.