Safeway reports Q1 results

PLEASANTON, Calif. Safeway reported Thursday a 33.5% drop in its net income for the first quarter, compared with the year-ago period.

The Pleasanton, Calif.-based chain said its net income totaled $96 million from $144.2 million last year. Despite the net income decrease, total sales for Safeway increased to $9.3 billion, compared with $9.2 billion in the year-ago period. Meanwhile, Safeway's gross profit declined to 28.4% from 28.7%, a result the chain contributed to increased advertising, partly offset by changes in product mix and improved shrink.

“Our first-quarter results were in line with our expectations, and we are reaffirming our earnings per share guidance for 2010 of $1.65 to $1.85,” said Steve Burd, chairman, president and CEO. “We are encouraged by our volume trends in the first quarter of 2010 compared to the fourth quarter of 2009, and the trends have improved in the second quarter of 2010. We believe we will continue to see positive trends in the second half of the year as the economy improves, deflation subsides and consumer confidence builds.”