Safeway Rises Most Since 2000 After Profit Tops EstimatesLeslie Patton
Safeway Inc. advanced the most ever after the second-largest U.S. grocery chain reported fourth-quarter profit that exceeded analysts’ estimates on higher stores sales.
The shares climbed 14 percent to $22.97 at the close in New York for the biggest gain since the company’s 1990 initial public offering.
Safeway is working to compete with big-box retailers such as Wal-Mart Stores Inc. with its grocery and fuel loyalty programs. Last month, Safeway announced Chief Executive Officer Steven Burd will retire in May after 20 years at the company. A replacement hasn’t been announced.
Net income in the quarter ended Dec. 29 rose 13 percent to $244 million, or $1.02 a share, from $215.6 million, or 67 cents, a year earlier, the Pleasanton, California-based company said in a statement today. Excluding gains from legal settlements profit was 94 cents a share. Analysts estimated 76 cents, the average of 19 projections compiled by Bloomberg.
Revenue increased 1.2 percent to $13.8 billion, helped by higher gift and prepaid card sales and an 0.8 percent gain in identical-store sales, excluding fuel.
Safeway has advanced 27 percent this year, compared with a gain of 4.4 percent for the Standard & Poor’s 500 Food Retail Index.
The company has about 1,640 stores in the U.S. and Canada. Kroger Co. is the biggest U.S. grocery-store chain.