Safeway reports 7.4% 2Q net income rise

PLEASANTON, Calif. Safeway reported net income of $234.3 million, or 53 cents per diluted share, for the second quarter of 2008, compared to net income of $218.2 million, or 49 cents per diluted share, in the like period last year.

Total sales increased 3% to $10.1 billion in the second quarter, compared to $9.8 billion in 2007. This increase was driven by contributions from Lifestyle stores, higher fuel sales and an increase in the Canadian dollar exchange rate, partly offset by a shift in Easter holiday sales, which occurred in the first quarter of 2008, compared to the second quarter of 2007. Non-fuel, identical-store sales declined 0.3% due in part to the shift in Easter holiday sales. Without the estimated impact of the Easter holiday shift, non-fuel, identical-store sales increased 1%.

"Our earnings performance this quarter was strong in light of a soft sales environment and the Easter holiday shift. We produced this earnings growth primarily through efficient retail execution, cost reduction and sales mix improvement,” said Steve Burd, chairman, president and ceo. “Free cash flow for the quarter was also very strong."

"We are focused on improving our sales momentum by delivering greater value to our customers," he added. "We remain confident in our ability to deliver earnings per share growth of 13% to 18% for this 53-week year."