Safeway Meets Targets

The grocer backs its full-year earnings view.
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Safeway

(SWY)

posted in-line third-quarter earnings and backed its guidance for the fiscal year.

The grocery chain's profit rose to $194.6 million, or 44 cents a share, from $173.5 million, or 39 cents a share, a year earlier. The earnings per share matched analysts' average forecast, according to Thomson Financial.

Sales inched up 3.9% to $9.78 billion from $9.42 billion. Wall Street expected a top line of $9.83 billion.

Excluding the effect of fuel sales, comparable-store sales increased 3.2%.

"Our Lifestyle store rollout, along with innovation in both perishable and non-perishable offerings, continues to generate sales growth in our stores," said Steve Burd, chairman, president and CEO. "This coupled with cost reduction efforts continue to drive strong performance."

Over the past two years, Pleasanton, Calif.-based Safeway has been focusing on so-called lifestyle stores, which are designed to appeal to an upper-scale customer base that has been flocking to grocers like

Whole Foods

(WFMI)

. The lifestyle format offers a wider selection of gourmet foods, fresh meats, produce and prepared meals.

For the full year, Safeway reiterated its forecast for earnings of $1.95 to $2 a share. Analysts see earnings of $2.01 a share.

Shares of Safeway recently were down 52 cents, or 1.6%, to $32.75.