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Safeway Q1 Prepares Ground For Gains

In the first quarter, Safeway Inc. generated net income of $118.9 million, or 49 cents per diluted share, a number that includes tax benefits of 14 cents per diluted share. In the year-earlier period, Safeway posted net income of $72.9 million, or 27 cents per diluted share.

Identical-store sales increased 1.5%, excluding fuel, the company maintained, a result that got a 0.4% boost from the Easter calendar shift year over year. Idents took a 0.9% hit due to generic drug shifts in pharmacy, Safeway related. Total sales were $10 billion in the first quarter, essentially flat compared to the first quarter of 2012, Safeway noted. The supermarket operator pointed out that fiscal year 2012 ended on December 29, 2012, and did not capture all New Year’s holiday sales, with the lost revenues falling into the first quarter of 2013. Identical-store sales and unit volume got a 0.4% lift as a result, Safeway pointed out.

Citi analyst Deborah Weinswig, in a research note, observed that Safeway’s earnings matched an analyst consensus estimate, even if they fell three cents short of her own. However, she added that wellness, fuel and loyalty initiatives should boost the company’s idents in the second quarter.