Safeway reports 4Q earnings growth

PLEASANTON, Calif. Safeway reported net income of $338 million (79 cents per diluted share) for the 17-week fourth quarter of 2008 compared to net income of $301.1 million (68 cents per diluted share) for the 16-week fourth quarter of 2007.

“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. We are stepping up our efforts to provide increased value to our customers by lowering prices on everyday items, while continuing to provide quality perishables and great service.”

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.

Net income for the 53-week year 2008 was $965.3 million ($2.21 per diluted share) compared to $888.4 million ($1.99 per diluted share) in the 52-week year 2007. Annual earnings per diluted share increased 11% over last year.

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 sales and identical-store sales increases, excluding fuel, of 0.8%.

Safeway confirmed guidance for the year 2009 of $2.34 to $2.44 per diluted share and free cash flow of $1 billion to $1.2 billion.