Lifestyle stores boost Safeway's sales

PLEASANTON, Calif. Safeway Inc. today reported net income of $218.2 million (49 cents per diluted share) for the second quarter ended June 16. Net income in the second quarter of 2006 was $246.2 million (55 cents per diluted share).

Total sales and other revenue increased 4.9% to $9.8 billion in the second quarter of 2007 compared to $9.4 billion in the second quarter of 2006. Identical-store sales increased 4.5% for the second quarter of 2007. Excluding the effect of fuel sales, identical-store sales increased 3.7%. Contributions from Lifestyle stores as well as strong perishable and non-perishable performance drove this increase.

"Our positive sales and income trends continued in the second quarter, bolstered by strong performance from both new and seasoned Lifestyle stores," said Steve Burd, chairman, president, and ceo. "We are on track to deliver earnings toward the top end of the range we previously provided for the year.".

Net income for the first 24 weeks of 2007 was $392.6 million (88 cents per diluted share) compared to $389.1 million (86 cents per diluted share) in the first 24 weeks of 2006.

Safeway narrowed the earnings guidance range for 2007 to $1.95 to $2.00 per diluted share from the previously provided range of $1.90 to $2.00. Safeway confirmed 2007 annual guidance for both non-fuel, identical-store sales growth of 3.6% to 3.8% and free cash flow of $400 million to $600 million.