Safeway announced earnings grew 6% to $130.2 million, or $0.38 per share, on revenues of $10.1 billion during the third quarter.Same-store sales grew 1.5% excluding fuel while gross profit declined 114 basis points to 27% on declines in fuel and gift card commissions. Excluding those two points, margins remained flat.
Safeway reaffirmed earnings guidance and expects to report 1.0% store sales growth, excluding fuel, for the year.
“Our sales momentum continued to build in the third quarter, and our costs were well controlled,” Safeway CEO Steve Burd said. “At the same time, we continued to innovate throughout the business to meet our customers’ needs and build their loyalty.”
Interest expenses declined to $60.7 million on lower rates available and softened borrowing needs. Year-to-date net income is down 9.6% to $0.85 following the company’s Canadian dividend paid in the first half of 2011.