Safeway (SWY)

Q4 2011 Earnings Call

February 23, 2012 11:00 am ET

Executives

Melissa C. Plaisance - Senior Vice President of Finance & Investor Relations

Robert L. Edwards - Chief Financial Officer and Executive Vice President

Analysts

Mike Otway - Jefferies & Company, Inc., Research Division

John Heinbockel - Guggenheim Securities, LLC, Research Division

Michael Palahicky

Meredith Adler - Barclays Capital, Research Division

Kelly A. Bania - BofA Merrill Lynch, Research Division

Edward J. Kelly - Crédit Suisse AG, Research Division

Karen F. Short - BMO Capital Markets U.S.

Charles X. Grom - Deutsche Bank AG, Research Division

Charles Edward Cerankosky - Northcoast Research

Stephen W. Grambling - Goldman Sachs Group Inc., Research Division

Mark Wiltamuth - Morgan Stanley, Research Division

Andrew P. Wolf - BB&T Capital Markets, Research Division

Presentation

Operator

Compare to:
Previous Statements by SWY
» Safeway's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Safeway's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Safeway's CEO Discusses Q1 2011 Results - Earnings Call Transcript

Welcome to the Safeway Fourth Quarter 2011 Conference Call. [Operator Instructions] I would now like to turn the call over to Ms. Melissa Plaisance, Safeway's Senior Vice President of Finance and Investor Relations. Please go ahead.

Melissa C. Plaisance

Good morning, everyone, and thank you for joining us for our fourth quarter and full year 2011 earnings conference call. With me today this morning is Steve Burd, our Chairman, President and CEO; and Robert Edwards, Executive Vice President and Chief Financial Officer.

I'd like to remind you that management will be making statements during this call that include forward-looking statements within the meaning of the federal securities laws. Forward-looking statements contain information about future operating or financial performance. Forward-looking statements are based on our current expectations and assumptions and involve risks and uncertainties that could cause actual results or events to be materially different from those anticipated. However, we undertake no obligation to update or revise any such statements as a result of new information, future events or otherwise. For a list and description of these risks and uncertainties, please see our filings with the SEC.

And with that, I'd like to turn the call over to Steve.

Melissa C. Plaisance

Shirley?

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from Scott Mushkin.

Mike Otway - Jefferies & Company, Inc., Research Division

Jefferies. This is actually Mike Otway in for Scott. Steve, first, on your U.S. business. Our research had indicated that the food business in the U.S. had improved during the fourth quarter from an x fuel sales perspective. Yet it didn't really show up in the comp. Is that -- first, is that a fair statement? And if so, what do you think was going on in the quarter that caused it to not show up?

Mike Otway - Jefferies & Company, Inc., Research Division

Okay, that's helpful. And I guess in terms of U.S. versus Canada, any thoughts on did Canada do better or worse relative to the third quarter?

Robert L. Edwards

It's about the same.

Mike Otway - Jefferies & Company, Inc., Research Division

And then I just guess secondarily, in looking at the -- in the first quarter, have you seen any benefit in your pharmacy business or your pharmacy comp from the Walgreens Express situation? Any thoughts around that?

Operator

Your next question comes from John Heinbockel.

John Heinbockel - Guggenheim Securities, LLC, Research Division

Guggenheim Partners. So guys, couple of things. Steve, I take your comment with regard -- if you throw the calendar shift out in the first quarter, it sounds like you're probably running a comp that is similar to where you were in the fourth quarter. Is that not right? Has there been -- it's a little bit lower than that?

John Heinbockel - Guggenheim Securities, LLC, Research Division

You guys mean you're in line, right, with the fourth quarter?

John Heinbockel - Guggenheim Securities, LLC, Research Division

And this -- just as a follow-up to that, how much did the -- I imagine the generic shift didn't hit you much in the fourth quarter but is having a bigger impact in the first. Is that notable to callout?

John Heinbockel - Guggenheim Securities, LLC, Research Division

Now it also seems, just looking around your competitors, most people are behaving rationally still. And obviously, comps are pretty good for most. Would you -- is that a fair characterization that you've seen very little change in competitive activity? And is there -- what do you think happens if comps slow here because of this inflation or gas or whatever? Do you think that'll persist?

John Heinbockel - Guggenheim Securities, LLC, Research Division

But if -- would you say it's fair that promotional activity is -- remain fairly rational to date?

John Heinbockel - Guggenheim Securities, LLC, Research Division

And then just one final thing. You talked about investment in Blackhawk. Is that Cardpool or is that something else?

Operator

Our next question comes from Deborah Weinswig.

Michael Palahicky

This is actually Shane on the call for Deb. Just want to ask you on Canada. What are your kind of expectations with Wal-Mart adding a number of store and then, obviously, Target in 2013 is going to have its stores in place? I'm just wanting to kind of see what your thoughts are on that.

Michael Palahicky

And would you say -- and remember on your Analyst -- at your Analyst Day last year, you kind of had an index for the various different formats. Do you think that would hold true in Canada? Or do you think it would be a bit different?

Michael Palahicky

Okay, makes sense. And then just a quick housekeeping. Did you mean -- did you -- the distribution center that you mentioned, was that -- did you say it was a $0.14 benefit to earnings? Or was that...

Michael Palahicky

I appreciate the answers.

Operator

Our next question comes from Meredith Adler.

Meredith Adler - Barclays Capital, Research Division

Meredith Adler from Barclays Capital. This was a year where you put a fair amount of cash into your pension plan. I was wondering if you could talk a little bit about whether that was the corporate pension plan or multiemployer, what the status of the multiemployer is. And I think FASB is talking about having more disclosure in the footnotes about multiemployer plans, and I was wondering whether you're aware whether that's going to happen this year or at some later date.

Read the rest of this transcript for free on seekingalpha.com