Grocery-store Stocks Fall as Safeway Issues Earnings Warning
NEW YORK - An earnings warning today from Safeway crushed the entire grocery-store sector in early trading, CBS Market Watch reports.
Safeway cautioned investors that profits, before charges, would fall short of expectations by as much as 6 cents a share to a range of 71 cents to 73 cents a share for the second quarter. The company blamed the underperformance on softness in the economy, stepped-up competition and, "an overly aggressive shrink effort." Safeway also said there have been "disruptions" relating to its efforts to centralize buying and merchandising.
Safeway's warning came only days after Wal-Mart Stores reported an 11 percent market share of all grocery sales and laid out plans to expand food-heavy concepts.
Shares of the powerhouse Safeway plummeted 15 percent, trading recently at $31.40, down $4.78.
Other grocery-store chains dived right alongside Safeway. Winn-Dixie plunged by nearly 8 percent, or $1.39, to $16.90; Great Atlantic & Pacific Tea Co. wiped out 6.6 percent, or $1.34, to $18.97; Kroger erased 6.4 percent, or $1.35, to $19.85. Albertson's subtracted $1.51, or 4.7 percent, to $30.49.
In other financial news, A&P said Tuesday that the filing of its annual report continues to be delayed by an internal investigation into its accounting practices.
Safeway cautioned investors that profits, before charges, would fall short of expectations by as much as 6 cents a share to a range of 71 cents to 73 cents a share for the second quarter. The company blamed the underperformance on softness in the economy, stepped-up competition and, "an overly aggressive shrink effort." Safeway also said there have been "disruptions" relating to its efforts to centralize buying and merchandising.
Safeway's warning came only days after Wal-Mart Stores reported an 11 percent market share of all grocery sales and laid out plans to expand food-heavy concepts.
Shares of the powerhouse Safeway plummeted 15 percent, trading recently at $31.40, down $4.78.
Other grocery-store chains dived right alongside Safeway. Winn-Dixie plunged by nearly 8 percent, or $1.39, to $16.90; Great Atlantic & Pacific Tea Co. wiped out 6.6 percent, or $1.34, to $18.97; Kroger erased 6.4 percent, or $1.35, to $19.85. Albertson's subtracted $1.51, or 4.7 percent, to $30.49.
In other financial news, A&P said Tuesday that the filing of its annual report continues to be delayed by an internal investigation into its accounting practices.