PLEASANTON, CA
As Safeway prepares for its merger with Albertsons later this year, the company reported a
loss of profits for the first quarter compared to the same period last year. Loss from continuing operations, net of tax, was
$83.1 million for the first quarter, compared to a gain of $119 million for the same period last year –
more than 52% decline in profits.
Most of the loss is attributed to the company’s sale of 213 full-service grocery stores in Western Canada – a $5.2 billion deal completed in November – and the sale of 72 Dominick’s stores last year, according to San Jose Mercury News.
Meanwhile, Safeway reports that
sales and other revenue increased by 1% to
$8.3 billion from $8.2 billion in the same period last year due to an identical-store sales increase.
“We are working diligently to close the merger with Albertsons by the fourth quarter,” said Robert Edwards, President and CEO. “While sales met plan in the first quarter, income was slightly below plan, in part as a result of inflation in produce, meat, and pharmacy that was not fully passed along for
competitive reasons.”
Moving into the second quarter of 2014, Edwards indicated that the company plans to
boost its results by raising prices to cover costs for produce, meat, and other commodities. The fact that Safeway did not raise prices for the first quarter cut into its margins for the period. He did not mention how much prices would increase.
As of April 24, Safeway shares were at $34.02 and remained flat in after-hours trading. Stay tuned to AndNowUKnow for more financial news from the retail sector as it becomes available.
Safeway
