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Can Safeway Meet These Numbers?

By Seth Jayson - Updated Apr 10, 2017 at 1:46PM

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Checking expectations

Safeway (NYSE: SWY) is expected to report Q1 earnings around April 25. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Safeway's revenues will expand 1.6% and EPS will grow 20.0%.

The average estimate for revenue is $10.17 billion. On the bottom line, the average EPS estimate is $0.36.

Revenue details
Last quarter, Safeway chalked up revenue of $13.77 billion. GAAP reported sales were 1.2% higher than the prior-year quarter's $13.60 billion.

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

EPS details
Last quarter, non-GAAP EPS came in at $1.07. 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.

Recent performance
For the preceding quarter, gross margin was 30.1%, 20 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.

Looking ahead

The full year's average estimate for revenue is $44.98 billion. The average EPS estimate is $2.30.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 375 members out of 460 rating the stock outperform, and 85 members rating it underperform. Among 130 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 110 give Safeway a green thumbs-up, and 20 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.

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