PLEASANTON (CBS/AP) — Safeway Inc. reported a higher profit for the first quarter as the grocery store operator benefited from lower tax charges. But lower than expected revenue growth disappointed investor and shares fell sharply Thursday.
Shares of Safeway tumbled nearly 20 percent before finishing down just under 14 percent at $24.31.
The company, which operates more than 1,600 locations under names including Safeway and Vons, stood by its forecast for the year.
Sales at stores open at least a year, a key indicator of health, rose 1.5 percent.
For the quarter, Pleasanton-based Safeway earned $118.9 million, or 49 cents per share. That’s up from $72.9 million, or 27 cents per share, a year ago. Tax benefits contributed 14 cents per share to the latest quarter.
Net sales dipped to $9.99 billion, from $10 billion a year ago, as the company sold its Genuardi’s stores.
Analysts on average expected a profit of 35 cents per share on revenue of $10.15 billion.
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