The 10-second takeaway
For the quarter ended June 16 (Q2), Safeway met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased slightly and GAAP earnings per share increased significantly.
Margins contracted across the board.
Safeway tallied revenue of $10.39 billion. The 16 analysts polled by S&P Capital IQ foresaw sales of $10.33 billion on the same basis. GAAP reported sales were 1.9% higher than the prior-year quarter's $10.20 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.51. The 20 earnings estimates compiled by S&P Capital IQ averaged $0.48 per share. GAAP EPS of $0.51 for Q2 were 24% higher than the prior-year quarter's $0.41 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 26.3%, 70 basis points worse than the prior-year quarter. Operating margin was 2.4%, 30 basis points worse than the prior-year quarter. Net margin was 1.2%, 20 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $10.26 billion. On the bottom line, the average EPS estimate is $0.44.
Next year's average estimate for revenue is $44.42 billion. The average EPS estimate is $1.96.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 350 members out of 427 rating the stock outperform, and 78 members rating it underperform. Among 116 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 94 give Safeway a green thumbs-up, and 22 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 $20.84.
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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.