shares fell 8% Thursday after the company reported disappointing first-quarter results and said business for the rest of 2009 will likely be worse than previously expected.
The company now expects to earn $2.10 to $2.30 a share for the full-year 2009, below its earlier target range of $2.34 and $2.44 a share. Analysts had been looking for EPS of $2.23.
First-quarter earnings came in at $144.2 million, or 34 cents a share, down 25% from the year-ago period's $193.4 million, or 44 cents a share, and missing analysts' estimates for the quarter of 40 cents a share.
Revenue fell 8% to $9.24 billion, below analysts' forecasts of $9.86 billion. A year ago, the company had a top line of $10 billion.
Safeway blamed the poor results on a slew of problems, including overall price cuts (or what the company calls "investments in everyday prices"), lower fuel margins (the company also operates gas pumps), higher pension expenses, negative currency exchange rates and increased promotional spending.
In some good news, Safeway said it will raise its dividend from about 8 cents to 10 cents, payable July 16 to shareholders of record as of June 25.
That wasn't enough to hold up Safeway's stock price Thursday, however. Shares of the Pleasanton, Calif., company were trading at $19.48, down $1.80.
The entire supermarket industry has suffered as customers continue to cut personal spending, which, in turn, has put pricing under pressure as competing chains look to entice traffic into their aisles.
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