PLEASANTON, Calif. — Safeway here said it expects financial results to strengthen during the second half of the year, despite disappointing results for the first quarter and a prediction of similar numbers for the second quarter.
Speaking with analysts Thursday, two weeks before his retirement, Steve Burd, chairman and chief executive officer, said earnings for the quarter that ended March 23 got a boost from a tax benefit that was larger than the company had anticipated, with net income up 63.1% to $118.9 million. However, sales were flat at $9.9 billion because of the sale last year of 27 Genuardi’s stores and lower fuel sales. Identical-store sales, excluding fuel, rose 1.5%, including inflation of about 1% and volume increases of 0.5%, of which 0.4% resulted from a shift of New Year’s Day into this year’s quarter.
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The company said the results represent the fourth consecutive quarter of market-share gains in the U.S.
Burd said he anticipates second-quarter results will probably be similar to those in the first quarter, though the second half of the year should benefit from several factors, including the continuing maturity of the company's Just for U marketing platform in the U.S. and its rollout in Canada, the further rollout and maturity of the chain’s fuel program, the ongoing positive impact of Center Store upgrades, and a declining impact from generic drug introductions.
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