Safeway Reports $0.62 Vs. $0.57 EPS Est.; Revenues $12.8B Vs. $12.71B Est. (SWY)

Safeway SWY Reports EPS Of $0.62 Vs. $0.57 Est.; Revenues $12.8B Vs. $12.71B Est. Safeway Inc. today reported net income of $229.6 million ($0.62 per diluted share) for the fourth quarter of 2010. In the fourth quarter of 2009, Safeway reported a net loss of $1,609.1 million ($4.06 per diluted share) including a non-cash goodwill impairment charge of $1,974.2 million ($1,818.2 million, net of tax, or $4.59 per diluted share). The impairment was due primarily to Safeway's reduced market capitalization and a weak economy. Excluding the goodwill impairment charge, net income for the fourth quarter of 2009 was $209.1 million ($0.53 per diluted share). "We are pleased with the improving trends in sales in 2010, driven by our price reductions, reinvigorated private label brands and targeted marketing. These trends have continued into the first quarter of 2011," said Steve Burd, Chairman, President and CEO. "We are also encouraged by the results of our efforts to achieve cost reduction, especially in shrink and store-level efficiencies, as well as our strong annual free cash flow." Sales and Other Revenue Total sales were $12.8 billion in the fourth quarter of 2010 compared to $12.7 billion in the fourth quarter of 2009. Higher fuel sales and an increase in the Canadian exchange rate were offset by reduced sales due to store closures and a 0.8% decline in identical-store sales, excluding fuel. Gross Profit Gross profit declined 56 basis points to 28.08% of sales in the fourth quarter of 2010 compared to 28.64% of sales in the fourth quarter of 2009. Excluding the 60 basis-point impact from fuel sales, gross profit increased four basis points. This increase was largely the result of improved shrink, partly offset by investments in price in the first half of the quarter.