Safeway Q1 profit falls on tax charge
Pleasanton, Calif. -- Taxes related to Safeway's effort to pay down debt reduced its first-quarter net income, but the company's adjusted results beat Wall Street's expectations as its revenue rose, the Associated Press reported.
The company earned $25.1 million for the quarter, compared with $96 million a year earlier. This includes a tax charge related to a plan to pay down its U.S. debt with part of a $1.1 billion dividend in cash and debt from its Canadian operations.
Revenue rose 5% to $9.77 billion, beating expectations for $9.45 billion. Same-store sales rose 3.5%. Excluding the impact of fuel, that figure rose 0.4%.
The grocery chain said that its sales are consistently improving. Safeway's profit margin, however, was hurt by the higher prices it paid for the gasoline it sold during the period, and its shares fell.