Holiday shift takes toll on Safeway first quarter

PLEASANTON, Calif. Safeway reported net income of $144.2 million (34 cents per diluted share) for the first quarter of 2009 compared to net income of $193.4 million (44 cents per diluted share) for the first quarter of 2008.

“As anticipated, our earnings this quarter were negatively impacted by the shift in holiday sales, a decline in the Canadian currency exchange rate, a decline in fuel margins and higher pension expense,” said Steve Burd, chairman, president and CEO.

Total sales declined 7.6% to $9.2 billion in the first quarter of 2009 compared to $10 billion in the first quarter of 2008. This decline was the result of lower fuel sales (which was due primarily to lower fuel prices), a decline in the Canadian exchange rate and a shift in holiday sales.

Identical-store sales for the quarter, excluding fuel, declined 0.7%. After excluding the weeks affected by the shift in Easter holiday sales, identical-store sales, excluding fuel, increased to an estimated 0.2%.

Safeway lowered earnings guidance for the year 2009 to $2.10 to $2.30 per diluted share and identical-store sales guidance, excluding fuel, to 0.5% to 1.5%.