Safeway Q4 Profit Soars on Cost-Cutting Efforts

Pleasanton, Calif. Safeway said its fiscal fourth-quarter profit rose 12%, helped by cost-control efforts and an extra week in the period. The supermarket chain earned $338 million in the 17-week fourth quarter of 2008 compared to net income of $301.1 million for the 16-week fourth quarter of 2007.

Total sales increased 3.4% to $13.8 billion in the fourth quarter of 2008 compared to $13.4 billion in the fourth quarter of 2007. This increase was driven by the additional week in 2008 and identical-store sales increases, excluding fuel, of 0.4%, partly offset by a decrease in the Canadian exchange rate and lower fuel sales.

“Despite a difficult economic environment, our efforts to control costs helped increase fourth-quarter earnings per share by 16% over last year,” said Steve Burd, chairman, president and CEO. “In addition, we increased annual free cash flow 62% to $681 million.”

Net income for the 53-week year 2008 was $965.3 million, compared to $888.4 million in the 52-week year 2007.

Sales increased 4.3% to $44.1 billion in 2008 from $42.3 billion in 2007 primarily because of the additional week in fiscal 2008, increased fuel.