Safeway Sales Flat, Stock Drops 20%

Safeway Inc. stock slid almost 20 percent after the grocer reported flat revenue for the first quarter of 2013 and same-store sales that were lower than the company previously projected.

The company continues to gain in market share, however, according to Steve Burd, chairman and CEO, who retires from the company this month. “We are pleased that we continued to see market share gains in the first quarter,” he said. “Just for U usage continues to grow, and our partner fuel reward program is rolling out on schedule and resonating well with consumers. In addition, the successful IPO of Blackhawk Network Holdings last week highlights the value we are creating for our stockholders. The proceeds from our sale of Blackhawk stock were used to pay down debt."

Total sales were $10 billion in the first quarter of 2013, essentially flat compared to the first quarter of last year. Identical-store sales excluding fuel increased 1.5 percent -- offset primarily by the disposition of Genuardi's stores in 2012 and lower fuel sales in 2013. In a conference call this past February, Burd projected ID sales for the quarter to reach 1.8 percent to 2 percent.

Safeway invested $144.9 million in capital expenditures in the first quarter of 2013. For the year, it expects to invest approximately $1 billion to $1.1 billion in capital expenditures.

Pleasanton, Calif.-based Safeway operates 1,638 stores in the U.S. and Canada.