The second-largest supermarket chain in the U.S., Safeway (NYSE:SWY) reported on Thursday a stronger-than-expected increase in third-quarter profit on tighter costs and stronger sales, blowing away Wall Street estimates as uncertainties over the economy continued to grow.
The Pleasanton, Calif.-based food and drug retailer posted a net income of $130.2 million, or 38 cents a share, compared with $122.8 million, or 33 cents a share, in the same quarter last year.
Analysts polled by Thomson Reuters were expecting a profit of just 35 cents.
Revenue for the three-month period was $10.1 billion, up from $9.4 billion a year ago, trumping the Street’s view of $9.86 billion. The results were led by higher fuel sales and a 1.5% increase in identical sales, as well as stronger cost controls.
"Our sales momentum continued to build in the third quarter, and our costs were well controlled," said Safeway CEO Steve Burd in a statement. "At the same time, we continued to innovate throughout the business to meet our customers' needs and build their loyalty.”
Looking ahead, the company reaffirmed its fiscal view and said it predicts identical-store sales will be up about 1% for the year. The retailer said it bought back 10.1 million of its shares at a total price of $195.2 million during the quarter and still has about $900 million remaining.