Safeway Inc (NYSE:SWY): heading the right way with higher quarterly profit
On Thursday, Safeway Inc (NYSE:SWY), the supermarket chain reported a higher quarterly profit but also lowered its full-year forecast. Recently, the company announced that it had spun-off its gift-card unit, Blackhawk and sold its Canada assets. It reported a $68.1M income from its continuing operations or 28 cents/share for the Q2 that ended 15 June. A year earlier this figure stood at $47.6M or 20 cents/share.
With the exclusion of impact of the increased legal reserves, Blackhawk’s IPO expenses and the gain from sale of investments, profit from its continuing operations in the current quarter, stood at 24 cents/ share.
The Blackhawk sale
After discontinued operations’ adjustments, the company’s IPO and other items, Blackhawk has set its forecast at the lower end of its previous earnings outlook of $2.25-$2.45 per share. Behind Kroger company, Safeway is the No 2 chain. It also operates the Vons and Dominick’s stores. Safeway had announced in June that it will be selling the Canadian assets for $5.7B, to Sobey’s, the grocery chain. The proceeds will be utilized to buy back shares and pay down debt.
In April, Safeway took Blackhawk public and it still exercises control over the company that it had created in 2001. In Thursday’s trading session, Safeway Inc (NYSE:SWY) rose by 6.77%. The shares opened at $24.84 per share, rose to an intraday high of $26.40 and finally closed at $26.32. Around 14.42M shares exchanged hands in Thursday’s trading session. The average volume of shares traded over a 30-day period was 6.10M.
Safeway Inc is a drug and food retailer that operates in North America. As of 29 December 2012, it had 1,641 stores. SWY’s U.S retail operations are largely located in Hawaii, California, Oregon, Alaska, Colorado, Washington, Arizona, Texas, the Mid-Atlantic region and the Chicago metropolitan area. The company’s Canadian retail-operations are located primarily in Alberta, British Columbia and Manitoba/Saskatchewan.