The 10-second takeaway
For the quarter ended Sep. 8 (Q3), Safeway missed slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share grew significantly.
Gross margins contracted, operating margins shrank, net margins expanded.
Safeway reported revenue of $10.05 billion. The 16 analysts polled by S&P Capital IQ anticipated sales of $10.23 billion on the same basis. GAAP reported sales were 0.2% lower than the prior-year quarter's $10.06 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 $0.45. The 20 earnings estimates compiled by S&P Capital IQ anticipated $0.42 per share. GAAP EPS of $0.66 for Q3 were 74% higher than the prior-year quarter's $0.38 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 26.4%, 60 basis points worse than the prior-year quarter. Operating margin was 2.2%, 30 basis points worse than the prior-year quarter. Net margin was 1.6%, 30 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $13.83 billion. On the bottom line, the average EPS estimate is $0.75.
Next year's average estimate for revenue is $44.40 billion. The average EPS estimate is $1.97.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 363 members out of 444 rating the stock outperform, and 81 members rating it underperform. Among 119 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 96 give Safeway a green thumbs-up, and 23 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 $18.12.
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