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PLEASANTON, Calif. - Safeway Inc. on Thursday reported a 9 percent decline in quarterly profit as fierce competition curbed sales growth.
Safeway, which ranked No. 2 on Progressive Grocer?s Super 50 list this year, said net income in the fiscal third quarter ended Sept. 7 was $281.3 million, or 60 cents a share, versus $309.2 million, or 60 cents a share, a year earlier.
Looking ahead, Safeway said it is comfortable with analysts' consensus estimate of 84 cents a share for the fourth quarter, up slightly from 81 cents earned a year earlier. It said it expects to generate free cash flow of between $500 million and $600 million for the year.
Sales at Safeway stores open at least a year dipped 0.7 percent in the quarter, while identical store sales fell 1.4 percent as the shaky economy took its toll. Total sales edged up to $8.1 billion from $8.0 billion a year earlier on new store openings.
The company said it repurchased 32.9 million shares of its common stock during the quarter for $918 million. It has bought back 79.7 million shares since setting a buyback program in 1999, it said.
The retailer, which also operates regional supermarket companies such as Vons and Dominick's, said its gross profit declined 26 basis points to 30.69 percent of sales in the third quarter due to pricing and promotion costs.