PLEASANTON, Calif. — Safeway here said Wednesday it expects to see volume increases next year as perceptions of its lower pricing kick in, as targeted marketing programs are rolled out, and as inflation returns.
"All those things bode well and should be fully operational through the vast majority of 2011," Steve Burd, chairman, president and chief executive officer, told investors.
However, following lower financial results for the third quarter ended Sept. 11, Burd said results for the fourth quarter are likely to come in at the low end of the chain's guidance of $1.50 to $1.70 per share for earnings and between negative 1.5% and negative 1% for identical-store sales.
For the third quarter, net income dropped 4.7% to $122.8 million, while sales declined 0.6% to $9.4 billion and identical-store sales, excluding fuel, fell 2%; for the 36-week period net income was down 29.7% to $360.1 million, while sales rose 0.3% to $28.3 billion. Results for the quarter included a charge of $12 million for employee severance resulting from the shutdown of a distribution center in British Columbia, which was offset by a lower tax rate, the company said. For the 36 weeks, net income in 2009 included a $73.9-million tax benefit from a favorable resolution of tax matters.
