Safeway Q2 Sales Slip; Guidance Down

ELLIOT ZWIEBACH

PLEASANTON, Calif. — Safeway here said yesterday identical-store sales for the second quarter ended June 20 were negative — the first time in 18 quarters IDs have fallen into the negative range.

ID sales, excluding fuel sales and the shift of Easter to the second quarter, declined 2.2%; with Easter sales included, IDs were down 1.5%.

Steve Burd, chairman, president and chief executive officer, said the chain was lowering its ID sales guidance for the year to a range of negative 1% to negative 1.7%.

Net income for the quarter rose 1.8% o $238.6 million — including a benefit of $57.8 million following resolution of a tax issue in California, which boosted per-share results by 14 cents — while sales fell 6.5% to $9.5 billion; for the half net income fell 10.5% to $382.8 million and sales dropped 7.1% to $18.7 billion. The chain lowered earnings guidance for the year to a range of $1.70 to $1.80 per share, down from earlier guidance of $2.10 to $2.30.

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