Safeway net income up in Q1

PLEASANTON, Calif. Safeway reported net income of $193.4 million, or 44 cents per diluted share, for the first quarter of 2008 compared to net income of $174.4 million 39 cents per diluted share, in the first quarter of 2007.

The company reported that total sales increased 7.3 percent to $10 billion in the first quarter of 2008 compared to $9.3 billion in the first quarter of 2007. According to the company, the sales growth was due to contributions from Lifestyle stores, an increase in the Canadian dollar exchange rate and higher fuel sales drove this increase. Identical-store sales increased 4.5 percent in the first quarter of 2008. Excluding fuel, identical-store sales increased 2.9 percent. Easter holiday sales occurred in the first quarter of this year compared to the second quarter of last year. When adjusted for the estimated impact of the Easter holiday shift, non-fuel, identical-store sales increased 2 percent.

“We are pleased with our earnings performance in the first quarter of 2008,” said Steve Burd, chairman, president and chief executive officer. “Our earnings per share grew by 13 percent compared to the first quarter of 2007. Part of this growth was due to the shift in the Easter holiday. In addition, our efforts to reduce and control costs contributed to operating margin improvement. At the same time, we invested in lower prices to improve our competitiveness and enhance our consumer offering. We remain confident in our ability to deliver earnings per share growth in the 13-18 percent range for this 53-week year.”

Safeway confirmed guidance for 2008 of $2.25 to $2.35 diluted earnings per share and free cash flow of $500 million to $700 million. Safeway revised guidance for identical-store sales growth, excluding fuel, from a range of 3 percent to 3.2 percent to a range of 2 percent to 2.3 percent.

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