The 10-second takeaway
For the quarter ended Dec. 29 (Q4), Safeway met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share grew significantly. GAAP earnings per share grew significantly.
Gross margins dropped, operating margins increased, net margins expanded.
Safeway booked revenue of $13.77 billion. The 17 analysts polled by S&P Capital IQ predicted a top line of $13.75 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $1.07. The 20 earnings estimates compiled by S&P Capital IQ predicted $0.75 per share. Non-GAAP EPS of $1.07 for Q4 were 60% higher than the prior-year quarter's $0.67 per share. GAAP EPS of $1.02 for Q4 were 55% higher than the prior-year quarter's $0.66 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 26.5%, 380 basis points worse than the prior-year quarter. Operating margin was 3.3%, 10 basis points better than the prior-year quarter. Net margin was 1.8%, 20 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $10.13 billion. On the bottom line, the average EPS estimate is $0.34.
Next year's average estimate for revenue is $44.98 billion. The average EPS estimate is $2.11.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 370 members out of 456 rating the stock outperform, and 86 members rating it underperform. Among 129 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 105 give Safeway a green thumbs-up, and 24 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 $17.78.
Can your portfolio provide you with enough income to last through retirement? You'll need more than Safeway. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.
- Add Safeway to My Watchlist.
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. TMFDisclosureHere