The checkout lanes were quite busy for Safeway (NYSE:SWY), as seen in the grocery chain's first-quarter earnings release. Earnings, revenue, and comps were all higher in the quarter as shoppers continue to be drawn in by the grocer's Lifestyle changes. However, management feels it's too early in the year to increase full-year projections.

For the quarter ended March 24, Safeway generated a 22% jump in earnings to $174.4 million, or $0.39 per diluted share. Sales increased 4.8% to $9.3 billion, with identical-store sales also growing 4.8%. There were improvements in perishable and non-perishable items, and the company also credited the success to its Lifestyle stores and marketing strategies. The Lifestyle stores are meant to enable the giant grocery store to compete with the hipper, smaller grocers, primarily Whole Foods (NASDAQ:WFMI), by offering a larger selection of organic products and larger floral departments, for example.

Overall, it was obviously a successful start to the year for Safeway. However, there was one thing that jumped out at me. For the quarter, operating cash fell to $19.1 million. That's more than 85% below levels from a year ago. One reason the company gave for the jump was an increase in inventory levels. Based on its sales growth, it should have inventories under control, but it apparently doesn't.

Looking to the rest of the year, however, Safeway clearly plans to get its cash flow back into positive territory, so investors shouldn't get overly concerned. It expects to finish the year with free cash flow of $400 million to $600 million. It also stood by its guidance of $1.90 to $2 per share. Although it didn't increase its projection, management did say earnings would likely come in toward the top of that range. If it wants to keep the Street happy, it had better do just that, because analysts have the company penciled in for annual earnings of $1.98 per share.

Investors have loaded up on Safeway recently and have been rewarded to the tune of a 50% climb in the stock's price in the past year. For those looking to stock up at today's prices, I probably wouldn't count on seeing the same sort of payback. But, that doesn't mean they shouldn't consider shopping for Safeway. Despite the increase in the stock price, it still compares favorably based on its trailing P/E, which is 18.2. That's much cheaper than the 34.2 P/E for Whole Foods and even a bit less than the 19.3 P/E across the aisle at Kroger (NYSE:KR).

For more on how quickly items are flying off grocer's shelves, check out:

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Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies in this article.