Safeway Profit Drops On Higher Costs

PLEASANTON (CBS/AP) – Safeway’s profit in the second quarter fell 16 percent, as the grocery store operator spent more on advertising and launched a new loyalty program.

The Pleasanton-based company said higher costs offset rising sales rose and improving market share.

For the three months ended June 16, Safeway earned $122.7 million, or 51 cents per share. That’s compared with a profit of $145.8 million, or 41 cents per share, in the year ago period, when there were more outstanding shares.

Analysts on average expect a profit of 49 cents per share, according to FactSet.

Sales rose 2 percent to $10.39 billion, which also topped Wall Street expectations.

Safeway operates about 1,700 stores in North America under names including Vons in Southern California and Nevada and Randalls in Texas.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

 

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