Safeway Beats Up on Analysts Yet Again

Safeway (NYSE: SWY  ) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Safeway met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share expanded.

Margins contracted across the board.

Revenue details
Safeway recorded revenue of $13.60 billion. The 15 analysts polled by S&P Capital IQ expected sales of $13.48 billion on the same basis. GAAP reported sales were 6.2% higher than the prior-year quarter's $12.80 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.70. The 17 earnings estimates compiled by S&P Capital IQ averaged $0.64 per share on the same basis. GAAP EPS of $0.67 for Q4 were 9.8% higher than the prior-year quarter's $0.61 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 26.7%, 540 basis points worse than the prior-year quarter. Operating margin was 2.9%, 90 basis points worse than the prior-year quarter. Net margin was 1.6%, 20 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $10.02 billion. On the bottom line, the average EPS estimate is $0.30.

Next year's average estimate for revenue is $44.07 billion. The average EPS estimate is $1.82.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 328 members out of 403 rating the stock outperform, and 75 members rating it underperform. Among 111 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 94 give Safeway a green thumbs-up, and 17 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Safeway is hold, with an average price target of $20.21.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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